There Are a Vast Array of Reasons Why Oil Prices Fluctuate
One of the most popular topics in the world today is why oil prices fluctuate. Everybody seems to have an opinion about why oil prices fluctuate. Many people and some news organizations blame the government for rising oil and gas prices. In reality, the answer to why oil prices fluctuate is far more complicated than that. There is a vast array of reasons why home heating oil has increased recently.
In this month’s blog, Courtesy Oil is writing about why oil prices fluctuate. Some of the reasons why they increase and decrease include:
- World Political Upheaval
- Global Market Influence
- Winter Weather
- Trucker Shortage
- Supply and Demand
- Related Industry Price Changes
- Panic Buying
Oil Prices Can Increase During World Political Upheaval
World political upheaval can cause fluctuations in oil prices. They’ve soared worldwide since Russia invaded Ukraine. The United States banned the import of oil from Russia, and oil prices rose quickly. The European Union agreed to a ban of 90 percent of Russian Oil by the end of 2022. Political upheaval internationally can also delay access to oil if the oil is coming from other regions in the world. Oil prices also rose during the COVID-19 pandemic.
The Global Market Influences the Cost of Oil
Oil companies produce heating oil from crude oil, which is a globally traded commodity. Unfortunately, the price of crude oil affects heating oil prices in Pennsylvania and the rest of the United States. Geopolitical conflicts involving oil-producing countries affect the cost of oil. OPEC’s production levels and natural disasters are other reasons why oil prices fluctuate.
Competition Among Oil Companies Can Drive Prices Down
While you know oil prices can increase, they can also fall because of competition. If there are a vast number of oil companies in an area, competition among the companies can drive prices down. When you are a Courtesy Oil customer, you will always get the most competitive prices in the region.
Harsh Winter Weather Can Increase Oil Prices in Dunbar, PA
Changing weather is a big reason why oil prices fluctuate. The Northeast consumes much of the heating oil, particularly when the weather is colder. Increasing oil usage can drive the prices up. Heating oil costs have sometimes fallen in a warmer winter. They will also rise if the winter season is colder than usual. Winter weather in Fayette County, Westmoreland County, and Greene County can be very cold. Our Customers pay the price for that. If oil prices rise, rest assured Courtesy Oil will have competitive prices.
Trucker Shortage Has Increased the Cost of Oil Near Uniontown, PA
One of the side effects of the pandemic has been a shortage of workers and problems with the supply chain. That is especially true in the trucking industry. According to the BBC, the United States is down 80,000 truckers, which is the most in the industry’s history. So, there aren’t enough truckers to deliver the oil, driving up the price of oil.
Supply and Demand Causes Oil Prices to Fluctuate
Oil supply and demand can cause oil prices to fluctuate. When our oil demands increase sharply, refineries may have trouble keeping up with those demands. Cold weather stretches can affect supply and demand. Available supplies may run out faster than oil companies can replenish them. As a result, prices will increase.
Price Hikes in Related Industries Affect Oil Prices in Dunbar, PA
Oil prices can rise due to related industry price changes. We wrote earlier about the lack of truckers, but the cost of transportation for trucks can affect the prices. When the price of gasoline increases, that affects the trucking industry. When transportation costs rise, heating oil prices will also rise.
Oil Panic Buying Decreases Supply and Increases the Cost
We’ve seen oil and gas shortages during the pandemic. That has resulted in panic buying. Some oil and gas customers panic, and feel like they need to stock up in fear of further shortages. When consumers buy more oil than typical, the oil supply falls behind just when demand is increasing. As we have seen, this can cause the price of oil to fluctuate wildly. Oil prices become stable when additional supply arrives, and the anxiety of consumers decreases.
Our Customers Can Trust Courtesy Oil’s Affordable Products
Courtesy Oil delivers home heating oil, kerosene, and off-road diesel to residents of Southwestern Pennsylvania. We offer free delivery, budget plans, and even affordable heating tanks, to accomplish your heating needs more quickly and efficiently. We offer the most competitive oil prices in the region. Make sure your home, business, or work site has quality heating oil. Call Courtesy Oil when you need us.