There is a correlation between oil prices and interest rates. Increasing interest rates raise costs for consumers and manufacturers. One of the first things companies and consumers cut when cost of goods and services are higher is travel, which affects oil demand. When interest rates drop, consumers and companies are able to spend money more freely and increase travel which drives up demand for oil.
Oil is one of the most volatile commodities on the market. It helps to understand the factors that drive the price of oil and how traders, governments, and consumers influence it.
Oil prices are controlled by traders who bid on oil futures contracts in the commodities market. Futures contracts are agreements to buy or sell oil at a specific date in the future for an agreed-upon price. Oil derivatives are securities that are based on the underlying price of oil and traded on the exchanges. Both futures contracts and derivatives are traded daily based on traders’ perceptions of future supply and demand.
While supply and demand have an impact on fuel pricing, it is actually oil futures that set the price of oil. A futures contract for oil is a binding agreement that gives a buyer the right to buy a barrel of oil at a set price by a specific future date. Detailed information about how futures trading impacts fuel prices can be found on the U.S. Energy Information Administration Website- https://www.eia.gov/finance/markets/crudeoil/financial_markets.php
Distribution and marketing
Distribution, marketing, and retail dealer costs and profits are also included in the retail price of gasoline. Most gasoline is shipped from refineries by pipeline to terminals near consuming areas, where it may be blended with other products (such as ethanol) to meet local government and market specifications.
Some retail outlets are owned and operated by refiners, while others are independent businesses that purchase gasoline from refiners and marketers for resale to the public. The price at the pump also reflects local market conditions and factors, such as the desirability of the location and the marketing strategy of the owner.
The cost of doing business by individual dealers can vary greatly depending on where the dealer is located. These costs include wages and salaries, benefits, equipment, lease or rent payments, insurance, overhead, and state and local fees. Even retail stations next to each other can have different traffic patterns, rent, and sources of supply that affect their prices. The number and location of local competitors can also affect price.
Qualifications For Wholesale Transport Deliveries:
- Transport loads 9,000 gallons for propane
- Transport loads 7,500 gallons for diesel or heating oil, 8,500 gallons for gasoline, or any combination up to four distillate products.
To receive daily pricing sent directly to your email, or to establish a wholesale fueling account with Aero Energy, contact:
Pennsylvania & Delaware Customers: Call or text Tim Damien at 717-360-6744 or email Tim at TDamien@aeroenergy.com.
Maryland Customers: Call or text David Frazier at 301-606-8052 or email David at DFrazier@aeroenergy.com.