Furthermore, as far as price is concerned, what goes up generally has to come down. It’s simply a question of when. For all of us, the sentiment is that the sooner the better.
When war, geopolitical conflict, political upheaval, or natural disasters like tsunamis, earthquakes, and cyclones strike anywhere on the globe, they can influence crude oil and natural gas pricing. Propane is a by-product of both oil and natural gas, thus increasing costs for these commodities has a cascading impact on propane.
Before the start of the war in Ukraine in late February, energy costs had been on the rise as traders anticipated potential measures against the Russian energy sector if Russia went ahead with its plans to invade Ukraine.
Because it is the world’s third-largest petroleum and liquid fuels producer, behind only the United States and Saudi Arabia, Russia has clout. It exports both crude oil and natural gas in significant amounts.
Even the prospect of a supply interruption will have an impact on commodity traders’ purchases and sales. This is referred to as the fear factor in the high-pressure worls of investment.
When Russia invaded the United States and imposed a ban on Russian oil and petroleum products, as other countries did, we knew there would be a significant energy gap to fill. Those who make their money in the oil markets dislike uncertainty. This includes speculators who are betting on price fluctuations, as well as hedgers, who are protecting their clients who are invested in either the creation or use of oil.
The balance between supply and demand is the most significant factor that determines where prices go. Weather conditions also have an impact.
When a scarcity develops in an environment of high demand, such as the winter months, the market price rises. When a severe cold spell or persists for an unusually long time, this scarcity gets worse.
People may start to panic buy. An everyday example of how that works is what we saw at the start of the pandemic with the toilet paper shortage.
Other issues and costs have also arisen recently and they have an impact on fuel costs
We’re not sure where things will go from here. We can tell you that we are as concerned as you are.
Some individuals believe that when fuel prices go up, our profits increase. The reality is the opposite. People cut back usage when their propane and heating oil costs go up. Some customers delay their payments and our receivables climb. We must also pay our vendors on time, usually within 10 days of delivery. We must borrow more money from the bank in order to keep going. It’s a complete mess for everyone involved.
You may always count on us to keep you supplied with the propane and heating oil you need to keep your home safe and comfortable. We have been in operation for many years and have excellent relationships with suppliers and financial institutions.
At Dixon Energy, we are working to reduce America’s dependency on foreign oil with our blend of heating oil and Biodiesel. Using renewable resources like Biodiesel means less crude oil needs to be imported, which can help stabilize heating oil costs down the road.
If you are having trouble making your Dixon Energy payments, please contact us before you fall behind. We frequently can come up with a solution, especially if you’ve been with us for a while. We can also set you up on our E-Z Pay Budget Plan, where your propane or heating oil costs are spread out over the year into easy, affordable payments.
We can’t wait until fuel prices begin to drop. Until then, trust us to look out for you and let’s all pray for the people of Ukraine.
Do you have questions about our payment and pricing options? Get in touch with us and we’ll be glad to help in any way we can.