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Fuel Prices

by christopher@reilleygroup.com 31. January 2016 09:12

There are a lot of factors which can be attributed to the incessant rise and fall of fuel prices. Like any other asset, prices will vary based on supply and demand. While fuel price volatility is usually not a good thing, 2016's dramatic price drops are being welcomed by most with open arms.

Many oil producing regions are demanding that OPEC reduce production rates. This would lower supply while maintaining a high demand, which would increase prices. Acknowledging the fact that fuel prices could skyrocket at any time, consumers should make the most of the current low prices. Let's look at a few factors that influence fuel prices.

Some say that fuel prices reflect the global economy. Could more affordable fuel prices be a sign of a stabilizing economy? Maybe. While the cause and effect relationship between the two might be limited to a certain degree, studies imply that there is a strong correlation regarding consumer confidence, spending habits and fuel prices. As fuel prices increase, transportation and product shipment costs also increase. The additional burden will then be distributed to the consumers which will result in price hikes.

For us generator lovers, drops is gas and diesel fuel seem like a great opportunity to load up on fuel for reserves. Unfortunately, most gas only lasts 6 - 12 months before it starts degrading. With more fuels mixing ethanol, gas can have an even shorter shelf life. Maybe low fuel prices are going to stick around for a while, and we can all enjoy great diesel prices for years to come. What will happen to fuel prices in the future remains unknown.

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Economy

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