Martyn Bridges believes that the oil market looks promising for 2016.
The future is burning bright for oil
Published: 10 December, 2015
Worcester, Bosch Group has urged installers working in off-mains gas areas to stick with oil as the market looks set for a promising time.
While it may have been a widely-reported turbulent few years for the oil industry, Martyn Bridges, director of marketing and technical support at the heating and hot water technologies manufacturer believes that changes in the market will make a positive impact to off-grid homes throughout the UK.
Mr Bridges said: “The fall in oil prices – by around 50% since June 2014 – is a significant one, and one which has been welcomed from all aspects of our day-to-day business. Today, the price of oil sits at around 30-33p per litre, whereas 18 months ago the cost of a litre was as high as 55p. This saving has been instrumental in helping the market increase oil boiler sales by 8-10%.
“There seems to be a lot of caution among many users of oil when it comes to price, due to the various uncertainties regarding oil-producing countries and an acknowledgement that members of the Organisation of Petroleum Exporting Countries could, should they wish, reduce production to bring the price back up.
“Geo-political influences will always have an effect on oil prices, either pushing them up or bringing them down, but I believe as we progress into 2016, prices will remain strong. For instance, next year Iran will be welcomed back onto the market bringing with it another 400,000 – 500,000 barrels of oil per day. When we also take into account the fact that Saudi Arabia is now selling Bonds in their country because the price per barrel is as low as $50, it looks like prices are likely to remain low for the foreseeable future.
Mr Bridges continued: “As the fuel continues to be an attractive choice for those located off-grid, the status of oil boilers is also steady at the moment. The Latest Sutherland Associates table, comparing the cost of the most common fuels across a range of standard house types throughout the UK, puts oil as the cheapest heating fuel available – more cost effective than natural gas.
“Similarly for homeowners, it is still significantly cheaper to replace an old oil boiler with a new one than with any other solution, which can also offer up to 15% efficiency gains. So if ever the owners of older oil-fired boilers needed a reason to upgrade their heating systems, then they have a pretty compelling one at present.”
“Oil certainly offers a considerable opportunity to installers which extends beyond servicing current systems and fitting new boilers, as when oil systems are changed, it is not unusual to see a new tank put in as well, all of which contributes to the buoyancy of the market.”