Fluctuating oil prices affect everyone! From the elderly grandmother’s heating bill to commuters heading to work, to fleet managers and Florida owner-operators fueling their rigs every day to deliver the groceries and goods our nation depends upon — we’re all impacted by an unstable oil market.
At J.E.B Insurance Services LLC, our customers are Florida’s owner operators and fleet managers. Here, we’ll explain what’s going on in the oil market, with a reminder that all things must come to an end.
Florida Owner Operators ask us: What’s Going On With Oil Prices?
It’s a complicated topic, but here’s what Florida’s owner operators and fleet managers need to know:
- The US has been producing more oil than ever before, a role traditionally taken by Saudi Arabia and Russia.
- Instead of two leading players in the industry, the US makes three.
- Seeing their sales drop, Russia and Saudi Arabia entered an oil war, lowering prices and flooding the market, to put one of us out of the oil business.
- Stay-at-home orders and work-from-home initiatives due to COVID-19 drop the demand for oil and fuel even further.
- With no demand and an overwhelming supply, the value of oil dropped to historic negative numbers in April 2020.
If you’re asking: How is it possible that oil can be worse than worthless? In the broadest sense, it costs more to manage the oil — to have the right permits and inspections and tankers and drums — than the profits made by selling the oil. But oil investors are a savvy bunch, and negative oil prices won’t last more than a day or two.
How Oil Prices Affect Florida Owner Operators & Insurance
When oil prices are low, diesel prices are low, and oil changes cost less. So owner operators net more per load. You might not see the difference in fuel prices for a few days or weeks, because diesel sellers will need to sell out the old inventory at the old price first.
If the nation continues to stay on lock-down, we may also notice a drop in auto insurance and owner-operator insurance premiums. To put it plainly, fewer commuters on the road equals fewer accidents and fewer claims to be paid. This possible rate drop will be short-lived. Eventually, private drivers will be back on the highways. Those low fuel prices mean Americans will be taking more road trips and vacations, especially to the sunny beaches of Florida. So we expect accidents and insurance rates to jump again in Florida, and soon.
Want to learn more about Florida owner operator’s insurance? Let’s talk! Contact us for a free quote today. J.E.B. Insurance Services, LLC is licensed in Florida, Georgia, North Carolina, South Carolina, Texas, Iowa, Nebraska, Tennessee & Illinois.