Rubis executive explains factors influencing oil prices

Mon, Nov 28th 2016, 11:39 AM

Rubis Managing Director for The Bahamas and Turks & Caicos Gordon Craig explained why gas prices in The Bahamas tend to increase as the winter season approaches.

Speaking with Guardian Business yesterday, Craig said although it is not unusual for prices to increase around this time, there is also an increase in global oil prices which was sparked by growing prospects that the Organization of Petroleum Exporting Countries (OPEC) members would reach a deal on capping oil production sometime next week.

There are normal seasonal peaks where consumers can expect lower or higher gas prices. However, the volatility of oil prices has increased in the last two years and continues.

Craig pointed out that it's a simple matter of supply and demand.

He said that during the winter, "A lot of Americans and also the power companies have to generate more electricity for heating and that's where the demand for diesel, heating oil, and fuel oil increases significantly.

"As soon as spring comes that demand drops significantly because obviously people are not heating their homes, so there is less demand for fuel to generate power," Craig explained.

Also in the springtime, people start planning their summer holidays in North America and the demand for gasoline starts to increase significantly marking the months of June and July as peak months for oil prices to increase, Craig said.

The Rubis executive added that amid the anticipation of OPEC's decision, oil prices have increased in the global market, resulting in higher gasoline prices for countries across the world.

However, amid investor doubts that OPEC would agree to a production cut, some markets have experienced a decrease in oil prices.

Xian Smith, Guardian Business Reporter

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