International Oil Prices

You may have noticed that international oil prices are constantly in the news and are always changing. When thinking about ordering your heating oil it is useful to understand these fluctuations in the international oil prices and how they can affect the oil prices in the UK. If you are aware of this it is easier to recognise a good price for your heating oil when you see one and you may even be able to predict what will happen to kerosene prices in the near future!

All oil prices, whether domestic heating oil, commercial oil, or petrol and diesel, are heavily influenced by supply and demand on the global market. When demand is high and supply low international oil prices will skyrocket as we have see in recent years, particularly June 2008 when oil prices peaked at a record $147.77 per barrel.

So, have you ever wondered why oil prices have fluctuated so much in recent times? There are a number of reasons for this and here are just a few:

• Increases in demand - Over the past decade there have been massive increases in demand from the fast-growing Asian economies such as China and India. With the productive capacity of these countries expanding each year by around 10% and 7% respectively, they require more raw materials every year to produce their goods and services. Because of this increased demand for materials and oil in particular, world oil prices increase and it costs you more to purchase your kerosene each time.
• Speculation - when individuals try and predict what happens to the oil market, the price of oil can change drastically. For example if someone claimed there was going to be a worldwide shortage of oil next week, many homes would purchase a large quantity of heating oil straight away to avoid the risk of running out. This activity causes the price of oil to shoot up.
• Conflicts and Natural Events - These events such as conflicts and natural disasters can have a huge impact on prices because this area is a huge exporter of oil to the rest of the world. 
• The strength of the Dollar - The international oil prices are set in dollars which means that the performance of the dollar relative to all the other currencies in the world is very influential. If the dollar is high against the pound for example, oil prices will be higher than they would be if the dollar were low. This is what we see happening at the moment which is why the oil prices are slowly creeping up again.

Nobody can accurately predict the oil market (and we're no exception) but we CAN give you the maximum information about the current prices so you can buy your home heating oil at the best time and at the lowest prices.

For more information on how International Oil prices affect your domestic heating oil prices please visit ‘Your Heating Oil price explained' or check out our heating oil prices graph following the most recent trends in world oil prices.