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EIA releases January short-term forecast EIA turns up estimated rate increases — calls highest season-to-season growth for residential heating costs since 1975 Steve Sutherlin PNA Managing Editor
The Energy Information Administration short-term forecast released this month said residential heating costs will rise sharply in 2001.
The predicted 45 percent increase in the nominal average residential price would be the highest season-to-season growth rate since at least 1975.
Residential customers that heat with gas will see the greatest increase said the study, 70 percent above 1999-2000 levels.
Gas wellhead prices will average about $5.20 per thousand cubic feet (mcf) in 2001 (compared to an estimated $3.70 in 2000) and about $4.50 per mcf in 2002, the report said.
The study concluded that typical homes heating with oil will pay about 40 percent more for oil heat this winter than last year.
The report called for the average annual price of oil to decline by $1.00-$1.50 per barrel in 2001 and by perhaps $5 per barrel in 2002. Gas supplies tight The end-December 2000 estimated working gas storage level is approximately 10 percent below the previous low in 1976, but still is above lows seen in 1973.
Lower supplies resulted from large increases in heating-related demand in November and December.
Sharply higher natural gas prices since last month have generated significant upward adjustments in the organization's average winter gas price projections.
Continued strong demand this winter would keep gas stocks at minimal levels for the remainder of the heating season and ensure strong injection-season demand next spring and summer, the report said. Oil price reductions limited Analysis of industrialized country stocks suggests further oil price decline in 2001 will be limited, especially given the likelihood of a significant output cut by OPEC before the winter is done, the EIA said.
Lower average prices are being offset by higher demand (particularly in November and December, both of which exhibited about 28 percent more heating degree-days in the Northeast in 2000 than they did in 1999.
Although prices have eased some in recent weeks, the heating oil market is still relatively tight and subject to significant volatility.
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