Using The Price Range As A Way Of Seeing The Crude Oil Future

OIL

There are many forms of fuel that we can use for our lives and 

businesses. These sources include electricity, solar energy, fossil fuel and of course oil. The oil that we use originally comes from crude oil. This crude oil is the pure form of oil. For this reason the crude oil future can be somewhat difficult to predict.

There are many companies who will seek to buy the crude oil that is drilled. For these companies the crude oil future is one which is very important to gauge. Without having a proper analysis of the numerous industries who use this fuel source the oil importing companies will not have any idea about the amount of crude oil they should consider importing.

The crude oil future will need to be given much thought as the production count is measured in the amount of oil barrels which are filled. These oil barrels are the measurement amount for knowing the way that the oil should be distributed. With this knowledge the many governments can negotiate the price to pay for their share of the crude oil.

This however does not guarantee the crude oil future as with so many oil spills on land and the oceans there are some countries which are considering other ways of finding the crude oil they require. There is also the other problem of various countries needing the byproducts of the crude oil rather than the crude oil itself. This situation makes the crude oil future very hard to predict.

On the one hand the crude oil is not needed as other fuel sources are found and used. Yet as these new fuel sources are the byproducts of crude oil itself, there is a confusion to be found. It is this uncertain atmosphere which hinders the ability of knowing what the crude oil future is like.

To help the customers out perhaps the governments should find a way of locating and refining the oil at the same processing plant. This step would lower the costs the companies and governments need to pay. This is yet another solution to the crude oil future uncertainty.

Crude oil in all of its many forms whether it is refined or not is a commodity which is sorely needed. You can use the price range as a way of seeing the crude oil future. When the oil prices are high it means there is a demand for crude oil and the low prices mean a drop on the crude oil demand



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What We Can Expect with Crude Oil Future Prices

With well over a century of steady usage of crude oil, it is fairly easy to predict some of the recurring trends in the rise and fall of 

crude oil future prices. Here are some examples of changes that we can anticipate to occur right on schedule.  As the nation emerges from cold weather and reaches toward the summer months, more of 

us will be thinking about vacations to far away places, and maybe even some short trips to the beach if we live within a reasonable distance to the coastline. Past experience teaches us that we can expect an increase in crude oil future pricesus will be thinking about vacations to far away places, and maybe even some short trips to the beach if we live within a reasonable distance to the coastline. Past experience teaches us that we can expect an increase in crude oil future prices around the time that 

people begin to get serious about some holiday traveling. Everything from gasoline to airfare will increase around this time. 

 Just as predictably, any occurrence of natural disasters during the summer months will bring about increase in petroleum prices. Tornadoes and hurricanes that impact the production ability of 

offshore rigs and onshore processing plants will surely result in prices going up, even if people are not really in a good position to handle the increase. Keep your bicycle tires pumped up just in case. 

 As we begin to go into the autumn of the year, we will see crude oil future prices begin to level off and perhaps even dip a bit. It is usually not a god idea to get too excited with any significant change we see, as it will most likely be short lived. From the 

decrease, we can expect a small rebound to a slightly higher price, which will most likely be fairly constant for the winter months, barring any type of major problem somewhere in the world.  Predicting crude oil future prices based on past experience is a 

fairly reliable way for the consumer to plan for any upcoming changes that may have to be made in order to accommodate the shift in pricing. Make sure you watch the current status of the 

prices, and let history be your guide in planning your upcoming 

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Heating Oil Futures Prices and New Highs

Heating oil futures prices may hit new highs this year because of higher crude oil prices and the fact that a new refinery has not been built in the United States since 1976. This limited refinery capacity leaves heating oil futures prices vulnerable to price spikes if there are refinery problems, weather problems, political tensions in an oil producing region of the world or any other problem that hinders that flow of oil distillates from point A to point B.

Refineries have a vested interest in not storing too much heating oil. Storage and insurance costs cut into the profit margins so it makes sense to produce distillates when needed and not before. This can artificially limit supply and can influence distillate futures prices to the upside. The current situation in the United States is 27 year highs in inventories of distillates and consequently prices are near their yearly lows. This may leave the energy markets vulnerable to bullish price spikes over the next few months especially if the typical trend for world demand to increase in the second half of the year uses up the available inventories of heating oil.

The hurricane season now lasts from June 1 to December 1 and any major storms in the Gulf of Mexico may force evacuations of oil drilling platforms. Storms may also shut down important ports and shipping lanes if they approach the mouth of the Mississippi River. There are also many refineries near the Texas coast which may be damaged or shut down based on the severity of the storms. Any disruption in the production or transportation of heating oil from point A to point B can push futures prices dramatically higher.

Futures, options and foreign exchange products carry significant risk of loss. Past performance is not indicative of future results.

The author of this article is a 17 year veteran of the heating oil futures and options markets and the President of T & K Futures and Options, Inc.

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