To anyone that’s filling their petrol tank or heating their home without paying attention to the news, oil prices can seem to rise and fall with no real logic. If you ever wonder how these costs seem to yo-yo so unpredictably, here’s a guide to some of the most frequent factors involved.
Mother Nature Plays Her Part
Firstly, it’s important to understand that oil prices rise and fall based on perhaps a dozen different circumstances, all of which can affect the cost of imports, exports, and the eventual price you pay as a consumer. If you notice that prices are up in one country but down in another, it could be that one of those factors is not playing a role in one area, while in another location it is. Weather can play a big role; it may be costly to ship oil through a major storm in the Atlantic, for example. If other marine routes have calmer waters, those that receive oil via these routes may find their prices remain low.
Weather is not the only factor that shifts oil prices; geopolitical situations also play a strong role in determining the price of oil. The relationship that a consuming country’s leaders have with an oil producing country’s leaders can have a big effect on price fluctuations, and of course these relationships can change quickly – sometimes literally overnight.
Inventories are another important issue. For example, if a country opens their own oil pipeline, prices will drop internally – but even the oil imports coming into that country will be priced lower in order to compete with domestic oil. However, if domestic oil is in short supply, or supplies are uncertain, then imports will be likely to be priced higher.
Complex Systems Affecting Your Pocket
These are just a few of the factors that affect global oil prices; there are actually many more that play a role in determining just how much you will pay at the fuel station, or for the oil you use to heat your home. Some of these include exchange rates, production decisions, spare capacity, and speculation and hedging by traders. Everything from weather systems to a new leadership in a particular country can affect what you as a consumer end up paying. The reasons for oil price fluctuations may seem complex, even chaotic, but they do highlight the fact that that it pays to stay informed!
Winter is fast approaching, and with it will come heating costs, but you can help minimise your bills – if you start looking around now for a cost effective home heating oil supplier. While there is a base price for oil, not all suppliers charge the same, and each has their own markup policy. Therefore, a little research may be all you need to do in order to find a cheaper solution for this winter. Here are just a few tips to help you choose the best home heating oil supplier in your area. Check out our pricing and order online here
Which Type Of Oil?
First of all, you need to think about the type of domestic heating oil that you plan to use in your boiler. Generally you have two options: gas oil and kerosene. In most cases kerosene is the cheapest option, as it is a much more efficient oil. It also will tend to be priced lower.
Next, you need to look at a supplier that will deliver quickly and reliably, since you never want to run out of oil. After a few seasons, you should have an idea of how much oil you consume in your boiler – but even then, you can have rough patches where you simply eat up fuel more quickly than other years. Since oil is delivered in bulk and then stored in the tank, you need to make sure that you have a supplier on hand that can deliver within a reasonable time frame. You don’t want to be without heat because you are waiting for your supplier. Chose a local supplier like Thompson Fuels and you will never be let down.
Payments & Costs
Once you get these considerations taken care of, you need to consider the cost of oil. Since it is delivered in bulk you may have to pay for a large amount upfront – which can be hard to budget for. Some suppliers will allow you to make payments, so if this will ease your monthly budget, consider looking for one that will help you out in this manner.
Finally, you need to make sure you are being charged a good price on your oil. You can do this by keeping track of the wholesale prices of oil. Most suppliers make a minimum of a 4 pence profit per litre. So, if you are able to get a quote that’s around this figure, you have found a great deal. If the price is much higher than this, you’re probably getting ripped off!