Wanting to know how WVO feedstock prices will be effected if oil drops below $100 a barrel?

Wanting to know how WVO feedstock prices will be effected if oil drops below $100 a barrel? Will they stay were it is currently at or will it decrease as oil decreases in price?

Thanks,
Michael

michael@goodmanphoto.net

Wanting to know how WVO feedstock prices will be effected if oil

Michael,

WVO and other feedstock prices, as well as most of the other commodities should decrease in price around the same percentage.

The current demand for WVO is high due to the demand for affordable fuel. If regular diesel comes down in price people who burn WVO/biodiesel will just switch back to petro diesel if it is cheaper or more convenient. There are other issues that could create minor changes in the difference in prices in the USA...

For example: Europe purchasing the WVO because of the benefit of currency differences...Euros/BP can buy more than US dollar (price goes up)...more farmers needing cheaper animal feed (price goes up)...farmers not needing as much feed because they are not producing as much (price goes down)... restaurants not using as much oil because consumers are not going out to eat as much (price goes up), biodiesel producers going out of business because petro oil is cheap (prices go down), etc...

The real issue to pay attention to is not the cost of oil but the amount of money the US government spends and the deficit they are creating (value of the dollar). The cost of oil and WVO are not currently high due to supply and demand but more or less to inflation caused by a weak dollar and the speculators who know the dollar is only going to get weaker and create higher commodity prices.

WVO along with almost all the other commodities would decrease the most in the near term if the federal reserve raises the interest rates and/or starts to buy back the US dollars it has been printing and it would help if the USA Government did not spend as much.

So in short "yes, WVO should drop in price along with oil" although there are some minor supply and demand differences between the two markets.

Usually a price drop (or increase) is not because of oil prices but more directly due to the value of the dollar.

-The federal reserve raise interest rates/takes more dollars out of circulation commodity prices usually go down (stronger dollar can buy more),

-federal reserve lowers interest rates/adds more dollars into circulation prices go up (weaker dollar can buy less)...

WVO (tallow, yellow grease, etc..) and petro Oil are traded in US dollars so there value is directly connected to the value of the currency they are traded in. compare charts of tallow, oil, and gold. gold is a standard of value (always has, always will) - US dollar is manipulated!

Reply to this post

Image CAPTCHA
Enter the characters shown in the image.