Friday, December 18, 2009

Why does the price of heating oil keeps going up while the price of crude and other oils keeps going down?

This obviously makes no sense to me and i feel like i am being ripped off.





Plus most food like bread and milk most meat and eggs keeps going down in many stores while others store keeps it high.





Its bad for the economy but its good for the consumers, Early yesterday i bought several bags of food that really cost in total about 200 or more dollars this time i only spent about 110 dollars in a month which i have to say it saved me alot.





What do you think.Why does the price of heating oil keeps going up while the price of crude and other oils keeps going down?
The price of heating oil keeps going up because the demand during the winter for it goes up. If you bought that heating oil during the summer, under normal circumstances, it would cost a lot less then what it costs in the winter, simply because there is a finite supply of heating oil and during the winter a lot more people are clamoring for it to heat their homes. It is supply demand basically. Some stores might be keeping those consumer staples high because they expect the price to rise in the future, but then again, I'm just speculating because nobody knows why their price is higher then their competitors except them. A big reason why you are seeing a drop in prices across the board is because the run up in prices has gone down due to lack of bidding on those goods. Wheat / grain, eggs, meat, etc. is all sold on the open market so when people were forecasting the economic future to look very grim, they expected higher prices in the future and were willing to bid / pay more for the guarantee of those goods in the future. The problem is a lot of others thought the same way and so they bid higher and higher and higher...you get the idea. Once people started to forecast a brighter future, they didn't need to feel compelled to bid up the price...so you pay less for those goods now then you did say 6 months ago. Why does the price of heating oil keeps going up while the price of crude and other oils keeps going down?
The simplest reason is that the price of crude oil is falling but the fuel prices are rising because there are many more factors involved is deciding the price for fuel. for eg.


1. Transportation:- It plays the biggest role in the price difference. The logistics is getting costlier because of the fuel prices and taxes by the govt. and so the transporters have to rise their prices to survive in the business.


Its all a vicious circle if one thing rise all others do. but if one thing lowers its not important for all others to fall.





I know at first it all doesnt make any sense but you can apply this to any sector in the world
  • cheap ink cartridges
  • No comments:

    Post a Comment