This is an excerpt from EERE Network News, a weekly electronic newsletter.
EIA: U.S. Home Heating Bills to Go Up 15 Percent this Winter
A colder winter and higher fuel prices are likely to drive up residential heating bills by 15 percent this winter, according to a report released on October 6th by DOE's Energy Information Administration (EIA). The EIA expects elevated crude oil prices to result in higher prices for heating oil, natural gas, and propane. Heating oil users will take the biggest hit, with a 29 percent increase in prices, although a slightly warmer winter in the Northeast is expected to hold the increase in those households' heating bills to 28 percent. The EIA says inventories of heating fuels are sufficient to avoid price spikes from surges in demand under most circumstances.
The EIA notes that current spot prices for crude oil continue to fluctuate above the $45 per barrel range, and projects the price for the fourth quarter to average about $46.40 per barrel. Prices remain high despite increased production by the Organization of Petroleum Exporting Countries (OPEC), in part because of oil production losses due to September hurricanes in the Gulf of Mexico. The hurricanes also impacted natural gas production. The spot price for natural gas at the Henry Hub, a major distribution point, averaged $5.15 per thousand cubic feet in September, and the EIA expects it to average $6.18 per thousand cubic feet in 2005. See the EIA press release and the October edition of the Short-Term Energy Outlook.
The International Energy Agency's "Oil Market Report," released on October 12th, notes that crude oil futures on the New York Mercantile Exchange (NYMEX) surpassed $53 per barrel in early October. See the highlights from the Oil Market Report and check the NYMEX Web site for the latest NYMEX oil futures prices.
The National Oceanic and Atmospheric Administration (NOAA) also released its winter outlook on October 6th, and it offers good news for U.S. heating fuels. A weak-to-moderate El Niño will cause a warmer-than-normal winter in Alaska, the West, and the northern and central Great Plains, and below-normal temperatures across the Gulf Coast states, the Southeast, and the mid-Atlantic region. In other words, many of the coldest parts of the country will have a warmer winter. Unfortunately, the forecast also calls for a drier-than-normal winter in the Pacific Northwest, which could impact next summer's hydropower production. See the NOAA announcement.