The fluctuations of the international oil market are never far from the news, and their contribution to low domestic oil prices is well understood. In recent months, however, they have been affected by low demand for heating fuel, as much of the northern hemisphere has experienced unusually mild weather.
The Weather and Heating Oil
The unpredictability of the weather in the United Kingdom is, of course, a national talking point. During the past few months, though, our counterparts in Europe and North America have been subject to wildly atypical conditions. There was much coverage, for example, of short-sleeved New Yorkers on Christmas Day, and numerous American states have recorded unprecedentedly high winter temperatures. Likewise, storms and flooding aren’t limited to our own shores: Mississippi, for instance, has just experienced a devastating hurricane. The reasons underpinning the dramatic weather are complex, with the El Nino phenomenon and unusual developments in the North Pole being cited as the most likely culprits. A collateral effect of the wet, mild conditions is that there is reduced demand for heating fuel, bringing domestic oil prices to near record lows. The American media went so far as to attribute a recent consumer spending spike to families having more disposable income owing to the low oil and domestic fuel prices.
How Do I Capitalise on Low Prices?
It is fair to say that analysts are not expecting prices to rise significantly during the next few months but, perhaps counter-intuitively, they recommend that consumers stock up now. The first reason is that with fuel purchased at current prices, you can plan your household finances with real accuracy: there will be no surprises to disrupt your budget. You will also have peace of mind that your family and home are equipped to deal with cold snaps, one of which is forecast for January. The second reason is that buying a large stock now can save on the delivery costs associated with smaller, more frequent orders. The final reason is that, while no immediate price rises are anticipated, the volatility of the oil markets means that there are no guarantees, and stocking up now would give you a degree of certainty.
At Value Oils, we constantly monitor the markets. Check our pages regularly for news and details of our pricing structure