Oil Prices: How Low Will They Go? And How Will It Affect Your Home Heating Oil Costs?

By Author: Andrew Higgins
Total Articles: 6
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Earlier this year, oil prices fell to below $50 a barrel. This is the first time that the world has seen such low prices since 2009. Later, costs crept back up to just over the $50 mark, but the indication is clear. Low oil prices are currently here to stay; and indeed, many experts predict that they may fall even further.
Heating Oil Suppliers and Oil Experts
The low costs of oil are having huge impact on the industry as a whole; and as a result, some oil suppliers are calling for production cuts in order to increase demand and drive prices upwards. However, large oil producing groups such as Opec are resisting such measures, which may push prices down even further.
Michael Hewson, CMC Markets analyst, comments: ‘With no sign that Opec will do anything about over-production, it seems likely that we could well see further declines towards $40 in the coming weeks.’
The Knock-On Effect of Low Home Heating Oil Prices
Of course, for those who using home heating oil, news of decreasing oil costs is inevitably well received. When buying through a heating oil supplier who passes the price reduction ...
... directly to the consumer, this means significant savings for the end-user.
However, for oil producing countries, the falling prices have spelt economic crisis. For nations such as Russia and Venezuela, who rely heavily on oil as one of their main exports, the dropping oil prices have had a significant impact, especially countries such as Russia, who are not tied to the dollar.
Passing Savings on to the Consumer
ValueOils have always maintained a strict policy of passing savings wherever possible to their clients. However, the same cannot be said for other oil suppliers, who instead, take advantage of the low prices, and boost profits by not reducing their retail prices accordingly.
Earlier this year, politicians called for lower oil prices for consumers, with George Osborne tweeting that it was ‘vital’ that the savings were passed on to ‘families at petrol pumps, through utility bills and air fares’.
However, the US treasury secretary, Larry Summers, points out that there may be environmental risks associated with lower oil prices. Cheaper fuel, for example, may inspire more people to use their cars more frequently, which in turn, would raise carbon emissions. Of course, as is so often the case in these situations, there is no ‘black and white’ answer, and ValueOil’s recommendation would be to enjoy the reduced costs of oil, but to aim to use your heating system sensibly throughout the year.
When Should You be Buying Home Heating Oil?
Certainly, it seems likely that the low prices aren’t going anywhere, or at least, aren’t set to rise in the near future. However, the summer months are often a good time of year to stock up on home heating oil, as demand is inevitably lower. Leaving it until the winter is seldom a great idea, as this is the season when you need your heating most, and it’s not advisable to leave purchasing oil to the last minute.
If you’d like to find out more about the current oil situation and how Value Oils are passing their savings directly to their customers, simply get in touch with the team today.

For more information : home heating oil, heating oil suppliers, Oil Prices