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Heating Oil Expenditure To Drop 2% This Winter States EIA Report

Expenditure on heating oil is expected to drop by 2% this winter. That’s according to the October 2013 Short Term Energy And Winter Fuels Outlook report released by the Energy Information Administration (EIA). In comparison there is expected to be a rise of 13% in the expenditure on natural gas. The EIA report predicts that the average price of heating oil for retail customers will be $3.68 per gallon over the winter. This is 19 cents lower than the average price for winter during 2012 – 2013. The reason for this drop is due to lower prices predicted for Brent crude oil. The largest component of heating oil prices is the price for Brent crude oil. Brent prices are lower due to the restart of production in Libya and concerns over the civil war in Syria lessening. Winter temperatures are expected to be similar for 2012, except in the North east where the predictions are for a winter which is 3% colder than last year. As a result demand for heating oil will be the strongest in the North east where a quarter of households will depend upon heating oil compared to only 6% of all US households. While prices are expected to decrease by 5%, additional consumption of approximately 3% accounts for the 2% drop in overall expenditure. The EIA also notes that households which are heating with natural gas will spend 13% more than last winter. That rise is due to a 14% increase in the price of natural gas balanced by a slight drop in consumption. The Short Term Energy And Winter Fuels Outlook report is not an absolute prediction of future prices and consumption, but it does offer a very useful guide. While prices for heating oil are predicted to be lower it is still prudent for households to limit their usage and therefore maintain heating costs even if prices rise further than expected. Give us a call today for your free quote!