David Blevings from NIOF said, “We are seeing an increase in local fuel prices. This is a result of inflated crude and wholesale fuel prices due to the current round of sabre rattling in the Middle East. Any sign of discontent in this region is usually bad news for oil prices as the threat of reduced supply spooks the market and pushes prices up.
Speculation is we could see $80/barrel by the summer and with OPEC and non-OPEC countries threatening to further tighten supply, this could be a reality.
The one bit of positive news is that as global oil prices rise, US shale production becomes more viable and we will see more shale oil make an appearance to assist push prices back down.
Looking forward we see the tension in the Middle East reducing as discussions there reach a peaceful solution and American shale production ramps up pushing prices back to the $50-60/barrel range. We would be confident that local home heat prices will return to a more ‘normal’ level by the end of the year.