There are many reasons as to why the prices of home heating oil can fluctuate. Some periods may see pricing at a steady rate, whereas at others they can swing wildly from day to day. When the oil held by both customers and wholesalers is plentiful, the prices tend to stay steady. Conversely, when we see drops in temperature, then the demand for oil skyrockets and we experience drops in the levels of oil available, therefore leading to fluctuations in the price. Obviously if many people are looking to acquire oil all at the same time, this is going to have a negative effect on the price. Not only is it a problem when the weather turns cold and everybody starts look for more oil, but transportation of this oil can also be adversely hit by prevailing weather conditions.
With everybody looking to acquire oil at the same time, it is only natural that reserves are going to start depleting. Cold weather snaps always increase the pressure on oil refineries to produce more heating oil for the consumer. As demand for heating oil increases, wholesalers will; start scrambling to stockpile enough of it to keep their clients supplied. The whole process then starts turning into a bidding war as such between the wholesalers and because of this the prices of the oil start to increase.
Another reason for increases in oil prices is the fact that when the weather gets really cold, other heating fuel prices can also soar even higher than oil and cause some people to switch from other fuels to oil. This then increases the prices further due to the increase in demand.
This winter is going to be ever so cold, so be certain that you have the needed cheap heating oil in place.
No comments:
Post a Comment