4 Reasons Why Commercial Fuel Oil Prices Are High

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What is the first thing that comes to mind when you think of commercial fuel oil prices? It’s probably something along the lines of “too high!” It seems as if nobody is satisfied with the price of fuel, and we all look for relief when we see that number climbing. While you shell out big bucks when filling up your tank, you probably do not think much of the reasons for those high prices. Unless something big happens, you will not find this type of information on the news. In fact, many people can not tell you exactly the process fuel goes through to get to our cars.

1. The Ultimate Source

Unfortunately, a lot of people only know a few things about gas. Some only know how to pull up, swipe their credit card, and fill up. However, there are still many curious to know where this stuff comes from. The basics is that it comes from deep in the ground, however that’s not all that is included in the process. There are a few different types of sources; shale, wells, and tar sands.

Shale is what you would find in deep oceans or remote areas, and is popularly acquired by hydraulic fracturing, or drilling. This produces the some of the most oil, which is millions of gallons a year world wide.

Wells are those big bobbing structures you can find in the countryside, or in a much larger form of offshore rigs.

Tar sands are a sandy and sticky form of petroleum, of which there are billions of gallons worth of world wide.

The effort and machinery it takes to get petroleum from the source is large factor of commercial fuel oil prices.

2. Refinement

Refining petroleum is a large and complicated job. The processes that go into this can explain much of the commercial fuel oil prices.

Crude oil, from the source, gets separated and heated at extreme temperatures in order to change the chemistry. Heating at different temperatures will produce types of oil and gasoline. Fuel oil, diesel oil, kerosene, and gasoline are all produced from crude oil. Gasoline takes the least heat to produce, at 150 celsius. Fuel oil takes the most heat to produce, at 370 celsius.

3. From one point to the next

Fuel is often not sold where it’s produced. It is traded, sold, and shipped all over the world. This is a giant factor in commercial fuel oil prices. Transportation is very expensive. There are a few key ways that fuel gets from the refinery to it’s destination.

You have probably heard of pipelines. They are all over the world, in the ground, in the ocean, and you most likely live in close proximity to one. There are over 2 million miles of fuel pipelines on Earth.

The old fashioned way, which is still used today, is through the railroads. Trains can carry many barrels of fuel to get from point A to point B.

Ships are a very common way of transporting oil from very far away. These ships are huge and designed to carry as much as physically possible. Some ships can carry millions of barrels of oil at a time.

4. Your gas tank

Finally, after the stations are all refilled with gas, you get to fill up your own tank. It’s just a tiny fraction of the amount that was pulled out of the ground previously, but it did take a lot of time and effort to produce. On the road, there are over 11 million vehicles in the world that must have gas to run. That’s a lot of fuel consumption. With such high demand, commercial fuel oil prices are bound to get high if there is not enough supply. You’ll often find that during a boom for the gas industry, the commercial fuel oil prices will lower drastically. This is good for you, but bad for the production companies.

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