End users' heating bills could be significantly higher this winter than last, especially if winter weather returns to normal from last year's unusually mild temperatures, according to the Energy Information Administration's Winter Fuels Outlook: 2000-2001. Higher prices are the likely result of three factors: the low probability that this winter will be as warm as last winter; below-normal inventories of key heating fuels, especially heating oil; and high crude oil prices. The combined effect of higher prices and higher expected consumption will be increased heating expenditures for many consumers (see table). The increases, however, are not uniform across the three principal heating fuels:
| Average Consumer Prices and Expenditures for Winter Heating Fuels | ||||
Forecast |
||||
Fuel |
1997-1998 |
1998-1999 |
1999-2000 |
2000-2001 |
| Natural Gas (Midwest) | ||||
| Consumption (Mcf) | 82.4 |
84.5 |
81.7 |
90.9 |
| Average Price ($/Mcf) | 6.56 |
6.27 |
6.61 |
8.58 |
| Expenditures ($) | 541 |
530 |
540 |
780 |
| Heating Oil (Northeast) | ||||
| Consumption (Gal.) | 636 |
650 |
644 |
693 |
| Average Price ($/Gal.) | 0.92 |
0.80 |
1.18 |
1.37 |
| Expenditures ($) | 585 |
520 |
760 |
949 |
| Propane (Midwest) | ||||
| Consumption (Gal.) | 814 |
835 |
807 |
898 |
| Average Price ($/Gal.) | 0.94 |
0.85 |
1.02 |
1.16 |
| Expenditures ($) | 765 |
710 |
823 |
1,045 |
| Notes: Prices are national averages, expenditures are based on typical per household consumption by region. Natural gas and propane prices include taxes. Mcf = thousand cubic feet. Source: Energy Information Administration. |
||||
- Natural gas
- Although temperatures averaged 12 percent above normal nationwide last winter, they ran up to 18 percent above normal in the major gas consuming regions. A return to normal weather this winter thus implies a relatively large increase in consumption. Combined with an increase in gas customers, colder weather is expected to boost natural gas demand by more than 6 percent. However, stocks (critical to meeting winter demand) are about 9 percent below recent averages because of strong summer demand. In the report's base-case projection, this factor, plus high crude oil prices (which triggers fuel-switching) and low stocks of other winter fuels, is expected to drive the average residential gas price up nearly 30 percent over last winter's average.
- Heating oil
- Similar forces are likely to boost heating oil prices. A return to normal (colder) weather, greater transportation-sector demand for distillate (from which both heating oil and diesel fuel are made), higher oil prices, and lower inventories are projected to boost heating oil prices 16 percent, to an average of $1.37 per gallon this winter.
- Propane
- Overall demand for propane is expected to remain about the same as last winter; residential demand is likely to rise with a return to normal winter weather, but seasonal industrial demand for feedstock propane should decline. Propane inventories are within normal levels for the start of the heating season. Nevertheless, higher crude oil prices and natural gas prices, among other things, are expected to drive propane prices up. The base-case projection is for propane prices to rise to $1.16 per gallon, compared with $1.02 last winter.
Winter Fuels Outlook: 2000-2001, 11 pages, 3 tables. This report is available
only via the Internet.
If you are having technical problems with this site, please contact the EIA Webmaster at wmaster@eia.doe.gov or call 202-586-8959. For general information about energy, contact the National Energy Information Center at 202-586-8800 or infoctr@eia.doe.gov.
URL: http://www.eia.doe.gov/emeu/plugs/winter01.html
File last modified: October 23, 2000
