US oil heating costs to be highest ever
October 15, 2011
By Scott Jamieson
Oct 15, 2011 - The US-based Energy Information Administration is predicting an increase in heating costs across the board this winter, with those using heating oil to be hardest hit.
In what must be good news for pellet manufacturers serving the US market, the report released earlier this week projects average household heating expenditures
for natural gas, propane, and heating oil will increase by 3 per cent, 7
per cent, and 8 per cent, respectively, this winter (October 1 to March
31) compared with last winter, while electricity heating expenditures
fall by less than 1 percent. Average expenditures for households that
heat with oil are forecast to be higher than in any previous winter.
This forecast reflects higher prices for natural gas, propane,
and heating oil, and slightly milder weather than last winter in much of
the Nation contributing to lower consumption in many areas (see EIA Short Term Energy and Winter Fuels Outlook slideshow).
According to the National Oceanic and Atmospheric Administration's (NOAA)
most recent projection of heating degree-days, the lower-48
States are forecast to be 2 percent warmer during the October through
March winter heating season compared with last winter. However, heating
degree-day projections vary widely among regions, with the West
projected to be about 3 percent colder than last winter, and the South
projected to be about 5 percent warmer.
Forecast U.S. real gross domestic product (GDP) grows by 1.5
percent this year and by 1.8 percent next year, slightly lower than in
last month's Outlook. World oil-consumption-weighted real GDP
grows by 3.0 percent and 3.5 percent in 2011 and 2012, respectively,
compared with 3.1 percent and 3.8 percent in the last Outlook.
EIA expects the U.S. average refiner acquisition cost of crude oil to
average $99 per barrel in 2011 and $98 per barrel in 2012, compared with
$100 per barrel and $103 per barrel, respectively, in the previous Outlook.Advertisement
Natural gas working inventories ended September 2011 at 3.4
trillion cubic feet (Tcf), about 2.6 percent, or 91 billion cubic feet
(Bcf), below the 2010 end-of-September level. EIA expects that working
natural gas inventories will approach last year's high levels by the end
the injection season. The projected Henry Hub natural gas spot price
averages $4.15 per million British thermal units (MMBtu) in 2011, $0.24
per MMBtu lower than the 2010 average. EIA expects the rate of growth
in domestic natural gas production to slow in 2012, with the Henry Hub
spot price averaging $4.32 per MMBtu.
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