Low Oil Prices are Good News for Buyers

Oil prices hit a six-year low this week — a boon for automobile owners looking to save at the pump and when paying for their next quick oil change.

Healthy supplies of oil in the United States and in storage facilities drove prices down, and the Organization of the Petroleum Exporting Countries (OPEC) has so far received to intervene to try to increase prices. Despite a recent rise in the market, prices fell again recently to reach this week’s record lows.

Prices are expected to stay low thanks to the supply and to the lower demand at the end of the second quarter, when warmer temperatures undercut the need for heating oil.

The price of West Texas Intermediate crude fell to $44 a barrel on Monday, and Brent crude fell to $53 a barrel.

The United States has gained influence as a swing producer in the face of OPEC’s reluctance to intervene in the market. Producers of oil from shale rock have significantly increased U.S. oil supplies. These producers have put out four million barrels a day for the past six years, outpacing global production.

Some industry insiders expect this production to level off if prices remain low. Without steady profits, there won’t be as much incentive to keep up the same production pace. However, it is unclear how much producers can tolerate before scaling back.

Should OPEC change its mind and make policy about production, the market environment could change significantly and prices could go up. Nigeria and Venezuela are pushing OPEC to cut production to manage prices. However, Saudi Arabia and some of its neighboring countries are more committed to protecting their share of the market, no matter what it means for prices.

All of these movements in the oil market can be hard for average consumers to understand, especially when they seem to have no impact on our daily lives. However, policy changes and supply can have a significant impact on oil prices, which affects everyone in more ways than they may realize.

The price of oil affects how much you pay for heating, how much it costs you to fill up your car, and how much it costs for a quick oil change. It even affects how much you pay for household products and car maintenance supplies that use crude oil as an ingredient, such as lubricant.

No matter what’s happening with oil prices, McCluskey Chevrolet aims to offer the best deals on oil changes. Call us today to schedule an appointment.