News
Oil prices rise as world emerges from recession
Tuesday 25th August 2009
Earlier this month some of the world's leading economies announced they had finally emerged from the global recession. In Europe, the world's fifth largest economy, Germany, grew by 0.3% in the second quarter of 2009, the first time it had experienced growth since the same quarter of 2008. France also experienced the same level of growth, 0.3%. In Japan growth in the second quarter reached 0.9%, a sign that we can all look forward to better times ahead.
Because of this return to growth, international oil prices have increased significantly in just a few months. On Monday, the price of oil reached $640 per tonne. In comparison with this time exactly one quarter ago on 25th May 2009, oil prices were at $520 per tonne.
This price rise is largely due to an increase in demand. When countries experience economic growth, they produce more goods and services which are sold for more money. This extra money is fed back into the economy to you and I through wages, interest and dividends, and government payments. When people have more money to spend, prices tend to increase, which is what we are seeing with oil prices at present.
Another recent factor that has caused this price rise is the unexpected shortage of crude oil in the US. This impacts on global oil prices because the US is the largest economy in the world, so demands more oil than any other country.
Those who buy heating oil may have noticed these two issues have had large implications on the prices they have been paying. Domestic oil suppliers all over the UK and worldwide have had to raise their prices to combat these hikes. In just one week average oil prices have risen 1.5pence per litre, so 1000 litres will cost around £15 more overall.
Over the period of April, May and June 2009, the UK's economy shrunk by 0.8% and oil prices still rose. With this in mind, when the UK finally emerges from recession it is probable oil prices will increase even higher.
Although no one can accurately predict what oil prices are going to do next, with global economic recovery around the corner it seems likely that higher heating oil prices are on their way back. If you want cheaper heating oil prices, act fast - and remember you don't have to request delivery right away. With heatingoil.co.uk you can order for one month's time, so you take advantage of cheap prices but receive the oil when you need it.