With the recent conflict in Europe and resulting sanctions affecting oil imports and exports, many Long Islanders are experiencing the resulting impact of that at the pump. Some of the sharpest increases to our gas prices have been happening, and we know quite when the prices will go back down again. While this situation is an outlier, we’ve all noticed prices of oil going up and down over the years and even multiple times in a single year.
So, why is it that oil prices rise and fall?
What Are Three Major Things That Affect Oil Prices?
While there are multiple reasons why oil prices can fluctuate, we’re going to focus on three major things that affect oil prices. Those are supply, demand, and geopolitics.
The supply of oil is something that’s largely regulated by the Organization of the Petroleum Exporting Countries (OPEC). While not every oil-producing country is a member of OPEC – the U.S. is not a member – the 15 member countries produce a vast amount of the world’s oil supply.
The purpose of OPEC is to coordinate with member countries about the availability of oil on the global market. In addition to oil being a finite resource, if everyone were to put a lot of petroleum on the market all at once it could crash the prices and create a destabilized market. Prices would fluctuate wildly as a result. When a natural disaster, like a hurricane, knocks out a distribution line, that causes a limit on the supply which leads to regional spikes in prices.
Demand factors in at different times. For example, we all notice gas prices going up over the summer months which correlates to when people are out driving more, going on vacation, and so forth. We also notice heating prices are higher in the winter because the demand for heating oil is at its peak then.
When it comes to geopolitics affecting prices, wars in and between various countries can affect oil prices. We’ve seen that previously during the Iraq wars as well as during other conflicts in the Middle East, which is a major source of the global oil supply. Russia is also a key source of global fossil fuels, though most of its supply is sold to Europe, not the United States. Even so, as European nations seek alternate fuel sources to replace what it normally receives from Russia, that affects demand globally, driving up oil prices overall.
Is Home Heating Oil Going Up In Price?
Yes, it appears that the cost of heating will be up an average of 33% compared to last winter. In general, prices for heating oil tend to go up over time. Temperature does impact these numbers though.
If the overall temperature averages 10 degrees colder this season than predicted, you could be looking at an overall 50% increase. Conversely, if the temperature averages 10 degrees warmer, the increase could be as low as 22%.
Heating oil prices do drop outside of the cold months of winter. As a result, the best times to schedule a heating oil delivery would be between April and September, as the prices can start to tick back up in the chilly fall months.
Tragar Express Is Your Source For Discounted Oil On Long Island
A division of Long Island’s trusted Tragar Home Services, Tragar Express provides discounted oil-on-demand delivery services with the ability to shop and place orders 24/7. We have more than 60 employees to help ensure speedy delivery and excellent customer service. Contact us today and let us know how we can help you.