Research predicts oil price drop will continue

New research commissioned by OFTEC and the FPS predicts the price of oil will continue to fall over the next three years, spelling more good news for the industry.

The results forecast that by Q4 2014, the price of kerosene will have reached 55.52ppl in the UK and 75.81 cents per litre in Ireland. From there, prices are forecast to drop to reach 54.00 ppl in the UK and 74.10 cents per litre in Ireland by Q4 2016. The forecasts show that prices will fall further into Q2 2017 to reach 53.43 ppl and 73.39 cents per litre.

The predicted drop in oil prices comes at a time when gas and electricity prices are continuing to rise, evidenced by the latest Sutherland Tables data.

These figures show the average annual cost of heating a three bedroom home by gas and electricity has increased over the last three years by 34% and 27% respectively. This compares to the cost of using an oil condensing boiler which has fallen by 12% over the same period.

The National Audit Office also predicted that consumers face almost two decades of price rises for electricity, gas and water to fund £310 billion worth of new infrastructure.

Commenting on the research, which was carried out by UX Energy Services, OFTEC director general Jeremy Hawksley said: “It is of course impossible to predict how future world events will pan out and exactly how these will affect the price of oil.

“However, the research remains valid and shows that the general trend of falling oil prices is expected to continue. This underlines the fact that oil is becoming more affordable and competitive, and the cheapest option going forward for most off-gas homes.”