November 30, 2016
Today's the day where all eyes will be on Vienna, where the Organisation of the Petroleum Exporting Countries (OPEC) are holding a meeting to discuss the possibilities of cutting crude oil production, with the aim to decrease the production to meet global consumption, resulting in the increase of crude oil prices.
The reason for the proposed cut is due to the recent surplus of crude oil that has flooded the global market, causing oil prices to fall and keep on falling.
In previous meetings, Iran has been reluctant to agree to a cut in production and we’ve heard it on the grapevine that they could be given authorisation to cap the amount of crude oil they produce rather than reduce it, which will make an OPEC agreement more likely.
What will this mean for the price of your Heating Oil? Typically the price of Heating Oil increases with demand, so a slight hike in price is not uncommon at this time of year, but if previous OPEC meetings are anything to go by, Heating Oil prices have risen during the days before and after the event. In September this year OPEC vowed to limit production by approximately 700,000 barrels a day. Following this announcement we saw oil prices rise, but when a definite decision wasn’t made, traders had second thoughts and prices began to decrease again. Today, the BBC has reported that oil prices have risen by more than 8% as energy minister attend the meeting in Vienna.
We don’t know what the world’s largest oil producing countries will decide today, we could see the production cuts blocked or for the first time in 8 years, the production of crude oil in countries such as Iraq, Saudi Arabia and Russia could be cut.
Be assured that whatever the outcome, we will keep our customers up to date with all the news.
Why not top up your Heating Oil tank now to be on the safe side? Get a free instant quote here
1/12/16 UPDATE: We can confirm that the 14-nation OPEC members have secured a deal to cut the production of crude oil by 1.2m barrels per day from 1st January. Although no firm commitment has been made by non OPEC member Russia, it is believed that they will also cut their production by up to 300,000 barrels per day.