2016 Oil OutlookPosted Dec 01, 2016
This last season has been relatively quiet, with slight volatility, on the oil front since the massive drop in early 2015 following unprecedented oil production. Since then it has stayed primarily in the 40-50$ with one exception this last January when it fell to under $27 per barrel due to a host of speculations; tensions between Iran and Saudi Arabian regarding pricing, fears of China’s demand faltering, and general fears of global growth - all in addition to serious statistical oversupply concerns. After its rebound in March oil has stayed roughly between $40 and $50 per barrel, at an average of $45 and change per barrel. Propane has had an even calmer track record with Mont Belvieu spot price barely reaching over $.50 per gallon with an average of $.467 since the beginning of the year.
The EIA forecasts a reasonable calm winter with regards to oil pricing remaining competitively low through the rest of 2016 and into 2017. Last year we had an unusually warm winter which helped keep heating fuel costs down, in addition to low prices. This winter will be returning to relative normality in the northeast with an expected 13% colder season than last year according to the National Oceanic and Atmospheric Administration. While we can’t change the weather the continued effect of U.S. production, in addition to global influence, will keep heating oil prices far lower than usual again this winter as compared to the prices we saw in 2014 back through 2009 before bubble burst and the recession.