It’s all over the media and news, so it’s pretty hard to escape the newscast of the state of the oil industry right now. The six-year low price of crude oil is great news for consumers – whether it’s for personal use in a home bunded oil tank or within a particular industry that relies on fuel in order to operate.
After many years of fuel costs fluctuating, consumers will be enjoying this price slump and enjoying the extra cash in their pockets, that’s for sure. At one point fuel prices were heading towards the £2 per litre mark, but what caused this decrease and is it something to be concerned about? Is there going to be a backlash where the prices will suddenly rise steeply again?
Here at Tuffa Tanks, we believe these questions are important, and your concerns need to be addressed, so we have done our best to explain the situation for those that may not be fully aware of what is going on.
For the past six years, up until late 2014 to early 2015, the price of crude oil was relatively stable; at around the $110 mark – give or take ten dollars, and this became the norm. However, the last twelve months has seen a dramatic decrease in the price of oil, reaching lows of $43 last August and now “stabilising” again at around $50; less than half what it was a year ago.
Why did it happen?
The cost of oil and rate of supply has always been sensitive to the demand and needs of the world. In short, there is currently too much supply and not enough demand, which has resulted in a price war to sell ahead of the competition.
Following the worldwide economic struggles in the early noughties, the US decided to take matters into their own hands when it came to oil demands and began domestic production as a result, in 2010. This means there is less demand from the oil companies that have long supplied the western world; from Saudi Arabia, Nigeria and Algeria. These companies have been forced into the Asian market to stay in the oil monopoly; in turn, this has driven prices down in the west.
Alongside this, it is also important to note, that Europe has seen record numbers of energy efficient vehicles on the road and industries are moving more towards renewable sources of fuel. As such, there is less demand from a massive portion of the western world, leading to surplus stock.
How does it affect you?
Currently, the only difference consumers will notice is that they are getting much more fuel for their money. So, now is the perfect time to stock up on fuel; fill up your tank if you rely on fuel to heat your home.
However, with an unpredictable future in the oil industry ahead, it is hard to say how it will affect producers. Jobs may be lost, and the stock exchange involvement means it is liable to change at short notice.
Our advice is to enjoy it and be sure you take advantage of these low prices while they are around.
For those of you looking to move towards self-sufficiency, now is the perfect time to invest in a bunded oil tank for your home, allowing you to sit back and watch the savings stack up.
Please contact us on 01889 567700 for more information on the options you may have to make a change today.