Things to consider when it comes to oil prices.
By Dan Koltonuk 5/10/2018
Many of us have a vested interest in fuel prices at one or several points throughout the year. Whether you’re a daily automobile commuter, preparing for a summer road trip, or planning to fill your home fuel oil tank, you’re fully aware of price fluctuations in the oil market. And, you’ve likely read recent fuel outlooks in hopes you can strike while market rates are at a low point.
The retail prices of both gasoline and home heating oil are affected by the underlying commodity price –crude oil – which in turn is influenced by a number of market forces. Among these market forces are output, access to fuel, and global demand. Additionally, global events can cause abrupt elevations in fuel prices which makes the price of oil extremely volatile. This volatility is why heating oil prices can vary from day to day, although with the Co-op, you can rest assured you will always pay the same, transparent margin.
In their current summer outlook, the American Automobile Association (AAA) anticipates the highest Memorial Day gasoline prices in four years. Regardless of this forecast, the holiday weekend marks the beginning of holiday and summer travel demand, as well as the time of year when more-expensive summer-grade fuel is introduced. Along with a reduction in gasoline inventories, these factors represent several forces presently working in tandem to drive retail prices higher for gasoline and fuel oil.
While the cost of fuel has increased dramatically over the past few weeks, recent market reports have noted that US gasoline inventories appear to be rebounding while OPEC ponders increasing production and adding to supply. Given this information, it can be tough to determine exactly how high prices for both crude oil and refined products will reach this summer. For detailed information on what to expect as the weather warms, be sure to review the EIA’s most recent Short-Term Energy Outlook.