UPDATE: Oil prices have crashed –just like we said they would.
A barrel of oil was approaching $125 when we wrote our last Blog article. That article, modestly titled “Oil prices will crash in two months”, predicted that oil prices would head down instead of heading up. That raised a lot of eyebrows and we received our share of comments, many suggesting we should have our heads examined.
The mood was grim then and RV sales were dying on the vine. The consensus was that oil prices would only continue to rise in the face of numerous issues. The war in Ukraine and runaway inflation were the two big ones, but there were a slew of other headwinds facing, well, everyone, everywhere.
Fast forward to today and oil prices have dropped back below $100 per barrel. That’s a startling reversal. It’s also very good news for today’s RV buyer. Dealers are swamped with RVs that haven’t been selling and they’re under considerable pressure to unload their inventory. For the first time in several years, the RV buyer is in a position to call the shots.
The RV industry is one of the few industries in the country selling at prices well below inflation averages. Dealers are willing to discount heavily right now because they can’t afford to end the summer with a full inventory. Whatever they can’t move in the next three months, they’ll probably end up sitting on until next spring.
While we’re pleased that we called the trend before it trended, in the interest of full disclosure we should mention that our reasons that oil prices would drop were wrong. We expected an end to the whole Ukraine-Russia debacle by now. Following that, we felt that a cash-starved Russia would be flooding the world with oil and natural gas. Mostly they would need fast money to shore up their tumbling economy. And the ONLY thing that Russia has that the world wants is oil. We felt that Russia would turn on the taps because they need money, but also because they need some good PR. Russia’s image on the global stage isn’t very good right now.
While we were right about falling oil prices, we were wrong about all the Russian stuff. As everyone knows, that whole mess is turning in to a long slog that may last indefinitely. What DID cause oil prices to fall was the resourcefulness of the rest of the world. Alternate routes and negotiations enabled the rest of the world to move on without Russian oil.
That’s great news for the U.S. (we’re able to be as self-sufficient regarding oil as we want), and bad news for Russia. It’s a mixed bag for Europe. While they’re figuring out alternate supplies of heating oil and crude, European countries don’t have the luxury of an in-house oil supply like the U.S. They have to go searching. Or begging. Europe could be in for a long, cold winter, but they’ve managed bigger problems than this.
Regarding the RV industry, we’re predicting a rare golden window for today’s RV buyer. Despite inflation hitting everything, RV dealers are willing to negotiate for the first time in several years. While they’re paying more for inventory, they’re currently willing to sell for less. While that’s bad news for them, being stuck with a dealership full of unsold RVs when the snow starts to fall would be catastrophic. In other words, RV dealers are willing to sell at a loss right now. Today. And will continue to do so for the next several months. The RV industry hasn’t somehow escaped inflation, it’s just that the dealerships are now willing to eat the upcharge to keep the RV buyers buying.
If you’re considering an RV, now is the time to do your research. Our RV buying guides have helped tens of thousands of RVers buy right the first time. The best deal we have right now is our Travel Trailer & Fifth Wheel Bonus Package for those looking for a towable. For the motorhome crowd, check out the Motorhome Bonus Package.
As always, check those tire pressures before hitting the road. Not only is a tire low on air an accident waiting to happen, but proper tire pressures provide noticeably better MPG.
The RV Reviews.net Team