Future Price Of Propane

Written by Tara Peris
Bookmark and Share

The future price of propane is likely to fluctuate based on the price per barrel established by OPEC. Although many factors go into determining the future price of propane, the policies and regulations set by this organization are a prime influence. Thus, to accurately predict the direction of future propane prices, one must know about general market influences as well as the broader role of OPEC.

Propane comes from both natural gas and crude oil, as they are respectively processed and refined. However, current crude oil prices are a more significant determinant of propane prices at any given time. In addition, factors such as supply and demand, the location of the oil source, and the needs of the market being served are influential.

OPEC and the Future Price of Propane

The reason that OPEC exerts such a strong influence on the price of propane is twofold. First, this organization of Middle Eastern countries represents a significant portion of the world's crude oil supply. Thus, when it comes to issues of supply and demand, they are well positioned in the market. Secondly, because transportation costs are so high, especially when oil is brought in from such a distance, there are likely to be other additional costs that serve to inflate prices.

Consequently, for those with an interest in monitoring the future price of propane, it would be wise to stay up-to-date on current OPEC policies. This is easy to do when the organization makes its way to the front-page headlines; however, you should not wait for this to happen. Educate yourself about OPEC, and how their policies for oil production have been established.

Bookmark and Share