Rise of Modern Media Affecting Market Prices
Predicting prices in the fuel and propane industry is a lot like a night at the casino. Uncertain factors and inconsistent circumstances are both elements that go into winning the jackpot and determining the exact future price of fuel and propane. For Tim Danze, senior pricing analyst, recognizable factors are consistently moving industry prices up and down.
“Fear is often the driving force behind any fluctuation in the fuel and propane market,” Danze says. “Often it is not an actual change in supply that causes product demand to increase. Headlines motivate individuals to make emotional decisions that cause prices to rise and drop accordingly.”
In addition to consumer behavior, prices can be affected by extreme weather, such as a severe hurricane that might slow production. Danze believes that often times it is a perceived change in supply availability that changes prices such as international political issues that could prevent the sale of product from one country to another.
“With so much instantaneous information from social media at everyone’s finger tips, people are quick to react to any media that may negatively impact fuel and propane prices,” says Danze. “Much of what changes the market now is media driven compared to the past when supply and demand drove prices.”
Danze says MFA Oil focuses on a long term view of the market, rather than taking a reactionary standpoint. The company monitors the market daily, but focuses on a hedging strategy to minimize risk for the company from changing propane and fuel prices.