|
Department of Energy predicts higher heating fuel bills this winter Demand for heating fuels expected to be higher than in last winter’s record warm weather; inventories are below normal; prices are high Petroleum News Alaska
The U.S. Department of Energy’s Energy Information Administration says it expects this winter to bring higher heating bills than those seen last winter.
Under normal weather assumptions, the EIA said Oct. 6 in its monthly short-term forecast, winter heating bills for residential consumers could average from $190 to $240 higher than last winter.
The main reasons for this forecast are: demand for space-heating fuels is expected to be higher than last winter, which was the warmest on record; inventories of key heating fuels — especially heating oil — are below normal and substantially below those at the outset of the winter of 1999-2000, and crude oil and natural gas prices are at relatively high levels. Higher prices for crude oil have led to higher prices for all petroleum products this year compared to 1999 levels.
The agency said West Texas Intermediate crude prices are estimated to have averaged $33.88 per barrel for the month of September, high by historical standards but well below the daily averages (more than $37 a barrel) reached prior to the Clinton Administration’s Sept. 22 announcement of a limited exchange of oil from the Strategic Petroleum Reserve. The 30 million barrel planned exchange is expected, the EIA said, to make a temporary positive contribution toward alleviating tightness in Atlantic Basin fuel oil markets. Natural gas prices double Average spot prices for natural gas are estimated to have averaged about $4.96 per thousand cubic feet in September, nearly double the price from a year ago.
The EIA said it expects the year-over-year differential to widen somewhat by year-end. The primary cause of the increase in gas prices has been the strained supply situation, the agency said, although rising crude oil prices have also encouraged natural gas prices to advance.
U.S. working gas in storage is estimated to be about 9 percent below normal and about 12 percent below the year-ago level. Increases in gas production this year have failed to keep pace with demand, the EIA said.
Winter electricity demand is expected to be up, with winter heating degree days assumed to be 11 percent more than last year’s, which were well below normal. This winter, the EIA said, total electricity demand is expected to be about 2.8 percent above the year-ago level under normal weather assumptions. The increase is driven by increased demand in residential and commercial sections, which the agency said are expected to post growth of 4.6 percent and 3.9 percent, respectively.
| 