Around all the negatives of the past few weeks from the Covid-19 pandemic there have definitely been a few positives too; More focus on local food suppliers, new hobbies started, a wonderful sense of community blossoming, oh and of course a nice dip in the Brendt crude oil price!
But what does that mean to you?
In this article we explain why there has been a drop in the Brent crude oil price and what impact it has on the cost of your heating oil.
Why has the Crude oil price dropped ?
To help explain why the crude oil price has dropped you first need to understand that oil is a commodity, and as such it’s price fluctuates depending on supply and demand.
The on-going coronavirus pandemic has caused the world to put huge restrictions on travel and business activities, this caused the demand for fuel to drop through the floor.
Think about when you last filled your car with fuel? The knock-on impact of everyone not moving has been huge.
In addition, manufacturing businesses have been ground to a halt with employees instructed to stay at home. This lack of economic activity has meant that global oil demand is expected to fall by record 9.3 mb/d year on year in 2020 (source: International Energy Agency April 2020 ).
At the same time as demand dropping, oil producers continued to pump oil from their wells which has led to a surplus in production. This additional oil supply is so huge in some places that they are struggling to find enough storage to contain it – resulting in the negative figures seen last week in the USA.
Related article; How much does heating oil cost in Scotland? 6 factors that impact the price.
What a reduction in crude oil price means to the cost of your heating oil.
The result of a reduction in crude oil price means that the cost for heating oil has dropped from $68.83 per barrel in January to $19.07 per barrel in April 2020, the lowest price since 2016. This is great news for everyone who is watching their pennies at the moment, especially if their jobs are on hold or are at risk of redundancies.
With everyone at home pretty much 24 hours a day 7 days a week, your daily usage of oil is likely to have increased a little, but probably not hugely since the temperature outside is starting to warm up! This all means that there are savings to be made!
If you have room in your tank, now might be a great time to take advantage of these lower prices. You can order online or contact us by phone on 01356 648 648 to get a quote.
Related article: How to keep energy costs down during lockdown
5 FAQ’s about the reduction in heating oil price
#1 Are we likely to get heating oil for free?
Even in the USA where last week oil was trading at negative values, end customers such as homeowners would still be needing to pay for the product. This is because there are taxes to be paid on fuels and the distributors still need to charge for storage, transport and labour.
#2 How long will these low prices last for?
No-one really knows the answer to this, but a lot of it will depend on how quickly the lockdown is lifted so that business operations can recommence and the demand for fuel is driven back up. As China is getting back to work, it is expected that the price may start to rise as they are the world’s biggest oil importer, but at a time like this it is hard to say.
#3 What is your minimum fuel delivery order?
If you have a little space in your tank, you are likely wanting to know if you can still take advantage of the price drop rather than waiting until your usual full tank delivery. The answer is the legal minimum delivery fuel order is 500 litres
#4 What is the crude oil price today?
You can find out the crude oil price on this website link:
#5 Are you still delivering in lockdown and if so what preventative measures are you taking to minimise risk of Covid 19?
Yes, fuel is an essential service, and is big in demand at the moment; whether by our domestic customers staying cosy in their homes or our agricultural customers that are needing fuel for their tractors.
Your health is our priority and with that in mind we have taken a number of measures to minimise the spread of covid 19 through our service offering for details click here
