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Just like any other commodity, crude oil prices fluctuate with wide pricing swings during oil shortage and over supply in the market. Petroleum price in the US was highly regulated through much of the 20th century. Since the 19th century US crude oil prices averaged at $22.52 per barrel in 2008 after adjustment for inflation compared to $23.42 for worldwide price of oil.
The Oil and Petroleum has been rather ineffective in controlling oil prices. Rising prices caused several reactions among users – better home insulation, increased insulation in older homes, energy efficient industries, and production of automobiles with higher efficiency. These measures along with global recession led to reduced demand and a fall in crude oil prices. Higher oil prices prompted increased oil exploration and production outside of OPEC.
Other factors contributing to the current oil prices include a weak dollar and rapid development and growth in Asian economies and their unprecedented increased petroleum consumption. The 2005 hurricanes and problems in US refineries also contributed to higher prices. The 2010 oil spill in the Gulf of Mexico caused a fluctuation in oil prices.
During the recent political unrest in Tunisia and Egypt, oil prices surged as concerns sparked that anti-government protests in Tunisia, Egypt, Lebanon, and Yemen could affect oil production in the Middle East. Analysts forecast that a barrel of oil could cost as much as $130 in view of the situation.
Heating oil prices vary from area to area due to some of the following reasons:
- Seasonality in heating oil demand
- Changes in crude oil cost
- Local market competition
- Regional operating costs
A surge in home heating oil prices can change if refineries and dealers have sufficient heating oil in storage and temperatures do not fall quickly enough. However, with the onset of cold weather supply and demand can be interrupted.