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Heating Oil Consumers Take a Break From Soaring Prices

Heating Oil vs Natural Gas

Heating oil consumers in the country have had to put up with ever increasing costs of home heating oil prices for the last decade or so, but this time the US Energy Information Administration is reporting a drop in prices as natural gas takes the heat in hiked costs. Oil customers are expected to spend 2% less to heat their homes this year and although this might not appear to be a major drop in cost, it represents a significant shift from previous forecasts.

Yeager’s Fuel in Allentown is selling oil for $3.49 per gallon- which is 30 cents less than it was a year ago. The low prices make it easier for the average homeowner to heat up their home and consequently the industry benefits from cheap home heating oil.

Homeowners using natural gas should expect to pay more this year- up to 13% more than they spent last year. The rise in cost is expected to persist and homeowners could spend up to 25% more if the average temperature hovers ten percent below normal temperature. But even so, prices are relative, and natural gas still happens to be the more affordable choice when compared to oil.

According to the EIA, the average heating oil customer from the Northeast is expected to spend no less than $2,046 on heat this winter, a 35% increase from the 2008-2009 winters. Natural gas users stand at $1,045, a drop of $215 over the last five years. The price difference between the two energy sources is attributed to a new hydraulic fracturing technology which has led to a surge in domestic gas production in the country.

The increase in domestic gas production has lowered the overall price, making it more accessible for the average consumer. While the energy market may appear to be out of balance, most market analysts expect prices to level out soon.