Report: Heating costs likely to rise significantly this winter
NEW YORK (CNNMoney) — Heating costs are likely to significantly rise this winter, due primarily to much colder weather rather than higher prices, according to a government report released Wednesday, October 10th.
The Energy Information Administration forecasts that those using home heating oil, primarily homes in the Northeast, will get stuck with record high heating bills this winter. Heating costs for those homes could hit an average of $2,500 — up 20% from last year, even though the fuel price is expected to only rise 2%.
The National Oceanic and Atmospheric Administration forecast an 18% rise in the number of days that homes will need to turn on their heat this winter compared to last year. Only states west of the Rockies are expected to have weather that’s comparable to last year, which required 16% fewer heating days than the five years prior.
Homes heated with natural gas, used in nearly half homes nationwide, will see bills that are 15% higher, even as prices edge up only 1%. Nationwide, those heating bills will average about $700, according to the forecast; Northeastern homes heated with natural gas will average about $1,000.
Homes using propane will cost about 13% more to heat than last year, while those using electricity will spend 6% more. Those increases will come even though electrical rates and propane prices are expected to be cheaper they were than a year ago.
There could be some relief on oil prices, according to a separate forecast released by OPEC on Wednesday. The oil cartel said world oil demand is expected to grow only modestly and will be in line with previous estimates, although there could be a drop in demand..
“Slower industrial production has sharply reduced global oil demand in both the U.S. and China, and the winter outlook represents further uncertainties,” said OPEC’s report. The OPEC forecast said there is a greater chance that oil prices would fall rather than unexpectedly rise.
Oil futures were slightly higher in midday trading Wednesday, though natural gas futures were lower.