Winter outlook: Colder weather and higher heating bills.
WASHINGTON - Oct 6 (The Associated Press)
Residential heating costs are projected to soar this winter to more than $1,000 on average because of higher fuel costs and expected colder weather, the government said Wednesday.
In areas with severe weather or a sudden spike in demand, costs could increase several hundred dollars beyond that, according to the forecast. No shortages were predicted.
Now that crude oil has climbed above $50 a barrel, the wholesale cost of heating oil has nearly doubled, compared with last year's. Natural gas prices have risen in recent weeks to more than $7 per thousand cubic feet despite reports of adequate supplies. It was in the $4 to $5 per thousand cubic feet range earlier this year.
"Higher (fuel) prices combined with a projected slightly colder-than normal winter season mean that most households and businesses will be paying more for heating fuels _ natural gas, heating oil propane and electricity _ in the coming months," the Energy Information Administration said in its winter outlook report.
The Energy Department's statistical arm said that heating oil users will see the sharpest increase with an average heating bill of $1,223 for the season, compared with $953 last year. That comes to a 28 percent increase.
But natural gas customers will be hit as well. They are forecast to pay $1,003, compared with $870 last year, an increase of 15 percent. Users of propane are expected to see a 21 percent increase to $1,396 for the heating season.
The agency warned that the projections are based on a normal winter and that costs could be even higher in region with significantly colder weather.
Government weather forecasters said Wednesday that the Southeast, Mid-Atlantic and Gulf Coast states can expect colder than normal conditions this winter. Warmer than usual conditions are likely in Alaska and the West.
The outlook for the Northeast, Midwest and parts of the Southwest was uncertain and could go either way, according to the National Oceanic and Atmospheric Administration.
The energy agency said heating oil inventories "appear to be adequate to insure against unanticipated demand changes" even if there is severe weather. But "demand surges" could cause prices to spike higher, the agency said.
A colder than projected winter could mean an additional 15 percent to 18 percent in heating costs, depending on the fuel, the agency said.
A surge in winter heating costs has been expected in light of the high crude prices and a recent jump in natural gas prices.
Heating oil for delivery in November increased to $1.42 a gallon, 70 percent higher than a year ago, on Wednesday on the New York Mercantile Exchange as crude oil edged up to $52.02 a barrel; both were records. Natural gas is 42 percent more expensive than a year ago, with the price for November delivery at $7.045 per 1,000 cubic feet.
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On the Net
Energy Information Administration: www.eia.doe.gov