What's New
Energy Department predicts lower heating bills this winter
According to the U.S. Department of Energy, households using natural gas can expect to pay an average of $119 less this winter season, which is a decrease of 13 percent from last year.
Natural gas producers are predicting the same, stating supplies are ample and even more is being produced. There are record supplies of the fuel in storage, well above normal levels, as the winter heating season approaches.
Consumers have experienced extremely high heating bills for the last three winters. And while lower prices are expected this year, things could change if there is an unusually cold winter season.
Highlights
--Prices for petroleum products and natural gas are projected to increase from current levels as the winter season approaches. But, for the first time since the winter of 2001-02, residential heating fuel prices for most Americans are projected to be either lower than or close to prices prevailing during the previous winter.
--Under the baseline weather case, winter (October 1 to March 31) residential natural gas prices, which were hardest hit by last year's hurricanes, are expected to average $12.23 per thousand cubic feet (mcf) compared to $14.64 per mcf last winter; heating oil prices are expected to average $2.46 per gallon compared to $2.45 per gallon; propane prices are expected to average $1.85 per gallon compared to $1.95 per gallon. Residential electricity prices are expected to average around 10.1 cents per kilowatthour (kwh) compared to 9.6 cents per kwh last winter.
--The baseline weather case is from the National Oceanic Atmospheric Administration (NOAA) projection of heating degree days published on September 21. Under this case, winter in the lower-48 States is forecast to be 5.9 percent colder compared to last winter but 2.1 percent warmer than normal (1971 to 2000 average). Because of expected colder weather, U.S. heating fuel consumption is projected to increase compared to last winter.
--Projected changes in heating expenditures relative to last winter reflect both price and weather changes, but lower expected prices for natural gas should result in lower heating bills for most American households. On average, households heating primarily with natural gas are expected to spend about $119 (13 percent) less this winter in fuel expenditures. Households heating primarily with heating oil can expect to pay, on average, $91 (6 percent) more this winter. Households heating primarily with propane can expect to pay, on average, $15 (1 percent) less this winter. Households heating primarily with electricity can expect, on average, to pay $58 (7 percent) more (residential space heating expenditures).
--Looking beyond winter, Henry Hub natural gas spot prices are expected to average $6.90 per mcf in 2006 and $7.53 per mcf in 2007. The price of West Texas Intermediate (WTI) crude oil is projected to average $67 per barrel in 2006 and $66 per barrel in 2007. Residential electricity prices are expected to average around 10.4 cents per kwh in 2006 and 10.6 cents in 2007. Retail regular gasoline prices are expected to average $2.58 per gallon in 2006 then dip to $2.51 in 2007.
For more information visit http://www.eia.doe.gov/emeu/steo/pub/contents.html#Electricity_Markets
Natural gas producers are predicting the same, stating supplies are ample and even more is being produced. There are record supplies of the fuel in storage, well above normal levels, as the winter heating season approaches.
Consumers have experienced extremely high heating bills for the last three winters. And while lower prices are expected this year, things could change if there is an unusually cold winter season.
Highlights
--Prices for petroleum products and natural gas are projected to increase from current levels as the winter season approaches. But, for the first time since the winter of 2001-02, residential heating fuel prices for most Americans are projected to be either lower than or close to prices prevailing during the previous winter.
--Under the baseline weather case, winter (October 1 to March 31) residential natural gas prices, which were hardest hit by last year's hurricanes, are expected to average $12.23 per thousand cubic feet (mcf) compared to $14.64 per mcf last winter; heating oil prices are expected to average $2.46 per gallon compared to $2.45 per gallon; propane prices are expected to average $1.85 per gallon compared to $1.95 per gallon. Residential electricity prices are expected to average around 10.1 cents per kilowatthour (kwh) compared to 9.6 cents per kwh last winter.
--The baseline weather case is from the National Oceanic Atmospheric Administration (NOAA) projection of heating degree days published on September 21. Under this case, winter in the lower-48 States is forecast to be 5.9 percent colder compared to last winter but 2.1 percent warmer than normal (1971 to 2000 average). Because of expected colder weather, U.S. heating fuel consumption is projected to increase compared to last winter.
--Projected changes in heating expenditures relative to last winter reflect both price and weather changes, but lower expected prices for natural gas should result in lower heating bills for most American households. On average, households heating primarily with natural gas are expected to spend about $119 (13 percent) less this winter in fuel expenditures. Households heating primarily with heating oil can expect to pay, on average, $91 (6 percent) more this winter. Households heating primarily with propane can expect to pay, on average, $15 (1 percent) less this winter. Households heating primarily with electricity can expect, on average, to pay $58 (7 percent) more (residential space heating expenditures).
--Looking beyond winter, Henry Hub natural gas spot prices are expected to average $6.90 per mcf in 2006 and $7.53 per mcf in 2007. The price of West Texas Intermediate (WTI) crude oil is projected to average $67 per barrel in 2006 and $66 per barrel in 2007. Residential electricity prices are expected to average around 10.4 cents per kwh in 2006 and 10.6 cents in 2007. Retail regular gasoline prices are expected to average $2.58 per gallon in 2006 then dip to $2.51 in 2007.
For more information visit http://www.eia.doe.gov/emeu/steo/pub/contents.html#Electricity_Markets
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