Seasonal Forecasts
Winter Prices Up for Oil, Propane
Heating oil costs are expected to be higher than ever this winter, contributing to higher seasonal energy costs. But homes that use electricity for heat could spend less than last winter, due in part to slightly warmer weather conditions.
Zach Conway prepares to load heating oil from a supplier in Omaha, Neb. Heating oil is expected to cost more than ever this winter in some areas. (Photo By: Associated Press/Nati Harnik)
“Expenditures are expected to increase this winter for fossil fuels, but not for electricity,” said Howard Gruenspecht, acting administrator of the Energy Information Administration.
The Department of Energy’s information analysis unit released its annual Short-Term Energy and Winter Fuels Outlook during the annual meeting of the National Association of State Energy Officials, Oct. 12, in Washington, D.C.
The forecasts covering the Oct. 1 through March 31 period focus primarily on electricity, heating oil, natural gas and propane.
“EIA expects households that use heating oil or propane to face the largest increase in heating bills,” Gruenspecht said. “And average households using electric heat are actually expected to see a small decline in their electric bills, compared to last winter.”
According to the EIA forecast, households using electric heat are expected to spend an average of $956 during the winter heating season, while those using heating oil will spend an average of $2,493. Average costs for homes using natural gas will be $744.
“We’re seeing 10 percent higher heating oil prices, 10 percent higher propane prices and 4 percent higher natural gas prices and 1 percent higher electricity prices,” Gruenspecht said. “Average expenditures for heating oil users are at their highest level ever.”
Current inventories of fuel oil and petroleum distillate are above their seasonal averages and propane stocks are adequate to meet demand in the event of supply disruptions or colder than anticipated weather, Gruenspecht said.
The forecast was based in part on National Oceanic and Atmospheric Administration data. Government climatologists are predicting that temperatures across the continental United States should be about 2 percent warmer this winter than last.
The South has the greatest concentration of homes using electric heat sources, and that area is expecting a significantly milder winter, Gruenspecht said. “In the South, the number of homes using electric heat has tripled over the last 30 years. Much of that increase has come from new home builds.”
Tags: Energy Information Administration, Fuel Supply, Seasonal Forecasts