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Understanding the Current Oil & Propane Markets

Keeping You Up to Date About Changing Fuel Prices

fuel prices vermontWe’ve heard from a lot of you recently with concerns about surging oil and propane prices. Prices were already up more than a dollar this season from the previous year because of issues related to the pandemic. Now, the Russian invasion of Ukraine and subsequent sanctions have shocked the energy markets, causing a near-daily roller coaster effect on pricing.

Why Does the War in Ukraine Affect My Fuel Prices?

War, political strife, conflict, and natural disasters like tsunamis, earthquakes or hurricanes in other regions of the world can impact crude oil and natural gas prices. Since propane is a by-product of both crude oil and natural gas, rising prices for these fuels have a ripple effect on propane. Even the hint of a possible disruption in energy supply will heavily influence commodities traders in the energy markets. In the investment world, it’s called the fear factor.

Recently, we thought of events in the Middle East causing volatility in fuel markets. But Russia is the third-largest petroleum and liquid fuels producer in the world, behind only the United States and Saudi Arabia. It’s a major exporter of both crude oil and natural gas.

That’s why the U.S. ban on importing Russian oil and petroleum products—with other countries expected to follow—means there may be a big energy void to fill. And the people who make their living in the oil markets don’t like that uncertainty. This includes the speculators who are betting on price moves as well as the hedgers, who are limiting risk for their clients who are involved with either the production or consumption of oil.

Other Factors Are Also Affecting Prices

Even before the invasion of Ukraine, prices were being driven higher by the usual factors, supply and demand compounded by extreme weather. Also, the continued effects of the pandemic have come into play. The cost of delivering fuel has gone up, there are new expenses related to workforce issues, and supply chain problems have caused shortages, shipment delays, and inflated prices for supplies, parts, tanks, and other materials.

What’s Coming Next?

We know that when it comes to prices, what goes up must come down. It’s just a matter of when. For all of us, the feeling is, the sooner the better.

The main thing we can tell you is that we hate this as much as you do. Some people believe that when prices rise, we make more money. The opposite is true. People cut back on usage. They have trouble paying their bills and our receivables skyrocket. Yet our suppliers still expect us to pay in just 10 days. It becomes a bit messy for everyone involved.

One thing you can count on is that we will always be here for you with the fuels you need, at the best possible prices. As a family business with three generations serving Northern Vermont, we have the experience and understanding of fuel markets to plan in terms of supply. And, we have strong, longstanding relationships with our suppliers and financial partners.

If you’re having trouble paying your bill, talk to us. Many of you have been with us for a long time, and we will always work with you to give you more time. Also, now is a good time to ask us about our payment plans. They’re designed to help you keep bills manageable, and enrollment for next year will be opening soon.

As a Jack F. Corse customer, you can be sure we’re here for you whenever you need us. That’s our commitment to you! If you need to contact us for any reason, please feel free to call us or visit our office. We’re easy to find—right at the base of Mount Mansfield!