Higher heating bills coming

By Rex Nutting, CBS.MarketWatch.com Last Update: 9:41 AM ET Oct 6, 2000 NewsWatch Latest headlines

WASHINGTON (CBS.MW) -- Americans face "significantly higher heating bills" this winter, the Energy Department warned Friday.

The average household will pay from $190 to $240 more for heating this winter, assuming a return to more normal weather, the government said.

Because prices are high due to tight supplies and because the weather is likely to be somewhat colder than last year's record warm winter, average heating bills are expected to be 44 percent higher for natural gas customers and 25 percent higher for heating oil and propane customers, the government said.

Average natural gas prices are expected to rise 29.5 percent to $8.58 per million cubic feet. Average heating oil prices are expected to rise 19 cents to $1.37 per gallon, with two-thirds of the cost hike due to additional refinery and transportation costs.

Supplies of heating oil are expected to be "adequate to meet the needs of a normal winter," the Energy Information Agency said.

The government agency also predicted that the release of 30 million barrels of crude oil from the strategic petroleum reserve will add 10 million barrels to crude supplies available to U.S. refiners and will add 3 to 5 million barrels of distillates to U.S. supplies

http://cbs.marketwatch.com/archive/20001006/news/current/heating.htx?source=htx/http2_mw

-- Martin Thompson (mthom1927@aol.com), October 06, 2000

Answers

Heating Oil More Expensive This Winter By Peter Behr Washington Post Staff Writer Friday, October 6, 2000; 12:50 PM

The nation's households will pay about $200 more to heat their homes this winter because of higher fuel prices and short supplies, the federal Energy Information Administration predicted today. And a long, severe siege of winter weather could push those costs even higher, the agency said.

The steepest price increases will fall on families using natural gas for heating, EIA predicted.

EIA projects a normal winter season after unusually mild temperatures a year ago and that should push the demand for natural gas up by 10 percent over 1999 levels.

Natural gas prices are running nearly 30 percent above last year. The average heating bill for a Midwest natural gas customer is estimated to be $780 this winter, 44 percent above last year's average of $540, EIA said.

Heating oil costs for households in the Northeast will average $949 this winter, about $200, or 25 percent, more than a year ago, according to the agency's forecast. Heating oil prices have come down from peak levels in September because of increased crude oil production by the Organization of Petroleum Exporting Countries and the planned release of oil from the Strategic Petroleum Reserve. There isn't a way to rapidly increase the nation's natural gas supply.

Households that heat with propane can expect a 27 percent increase in winter fuel bills, to an average of $1,045 in the Midwest, while heating bills for homes using electricity are likely to be about 12 percent higher due to a combination of higher demand and higher electricity prices, EIA said.

EIA acting administrator Mark J. Mazur said the risk of an even sharper escalation in heating costs remains if this winter is severe.

Inventories of heating oil remain more than 15 percent below the year- ago mark. On the East Coast, stocks are 40 percent lower than in 1999.

Adam Sieminski, a financial analyst with Deutsch Banc Alex.Brown in Baltimore, said the inventory picture may be somewhat better than it appears, because of indications that many heating oil customers have been buying supplies in advance. Oil in household storage isn't counted in government inventory figures.

But Mazur said that's still conjecture.

Energy supplies are tight across the board, he said. "That means the system will be stretched" in a lot of ways

http://www.washingtonpost.com/wp-dyn/articles/A24778-2000Oct6.html

-- Martin Thompson (mthom1927@aol.com), October 06, 2000.