The cost of heating U.S. homes is likely to hit record levels this winter, according to projections by the National Energy Assistance Directors' Association (NEADA), an organization of state energy officials.
The group projects prices to increase by +10.5% for all families, reaching record levels for home heating oil, propane and electricity. The greatest projected increase will be in home heating oil, some +28% higher than last year, NEADA stated in its report. The average family will pay some $402 more than last year for heating oil, bringing the total cost to $1,834, the report added.
The average retail price for heating oil in 2005-06 was $2.45. It declined to $2.42 last winter. However, NEADA expects a $0.68 increase this winter. to $3.10 (+28%)
The retail price of natural gas fell from $14.66 (per hundred cubic feet) in 2005-06 to $12.42 last winter, but is expected to rise by $0.75 to $13.17 (+6%) this winter season.
The retail price of propane, which was $1.95 in 2005-06, remained relatively unchanged at $1.98 last year, but is expected to rise to $2.54 (+28.3%) this year.
Electricity, at $0.96 (per kilowatt hour) in 2005-06 climbed $.04 last year and is forecast to rise another $.07 on average this year to $1.07 (+7%).
Through September, crude oil futures have been trading at or near record levels of around $80 per barrel. Those elevated levels are likely to continue, according to the Short-Term Energy Outlook from the Energy Information Administration (EIA) of the U.S. Department of Energy.
"Oil market fundamentals will likely remain tight reflecting continued production restraint by members of OPEC, rising consumption, moderate growth in non-OPEC supply, and falling inventories," EIA said. "Barring a slowdown in oil demand growth, continued high demand and low surplus capacity leave the market vulnerable to unexpected supply disruptions through 2008."