Why Do Heating Oil Prices Continually Change?

Posted by myarticlenetwork on August 25, 2010

Maybe I’m missing something here, but I really don’t understand why the price of heating oil has to keep changing all the time. I have been told about the reasons behind it but to me it just doesn’t make any sense. I took A level economics and I still haven’t got a clue. Why does the same thing not happen with other products? What enables some products to be priced at a particular price which is kept for at least a year or so? I get really bothered by the constantly changing prices; I wouldn’t even mind if they changed every once in a while. It just seems so avoidable.

 

Supply and demand is the main culprit blamed for the rising and falling prices of heating oil. Although it would seem to make sense, is it really the cause of the changes in price. And its not as if the changes to supply and demand are not expected by the heating oil suppliers as they know there will be more people wanting heating oil in the winter and less in the summer. I just can’t understand then why the suppliers do not average out the price over the whole year and then stick to it so that heating oil users would know how much they had to pay.

 

In reality there is some truth being hidden by the excuse that supply and demand is to blame for the rise and fall of heating oil prices. To tell the truth, speculation is normally to blame for the changes in prices; this is when people who are not actually doing anything of real worth are trying to make money from barrels of oil. Speculators don’t drill oil, and they don’t refine it, they make their money from selling it and messing around with the markets. If we got rid of these oil speculators we likely would find the price of heating oil to be a lot more stable – that’s my opinion anyway.

 

Some people spend a lot of money heating their homes in the winter. Fuel such as electricity and gas show no signs of coming down in price. Clever people are switching to heating oil as a fuel though. Cheapest heating oil are the people tasked with keeping home oil tanks full. Oil suppliers are prevelant throughout the UK, and will supply, for instance heating oil gospel oak.