As parts of the country cope with a return of breathtaking polar vortex conditions this week, the dramatically cold weather has some people wondering if Americans will face a surge in heating fuel prices, like they did last winter.
But industry insiders and analysts say forecasts for relatively milder winter conditions overall, combined with the global downtrend in oil prices, might bring some relief this season, at least when it comes to keeping your home warm.
In its short-term energy and winter fuels outlook report released last month, the U.S. Energy Information Administration (EIA) forecast U.S. household costs for natural gas, heating oil, electricity and propane should be lower this winter compared to the 2013-14 season.
The EIA is projecting expenditures for propane and heating oil to be 27 percent and 15 percent lower, respectively, while it sees natural gas and electricity costs coming in 5 percent and 2 percent lower, respectively, than last winter.
"Since the cost of crude oil fell in the fall, we will start the winter season near the bottom price-wise," Paul Pastelok, AccuWeather.com's lead long-range forecaster, noted recently. "Even with a rise in cost by mid-winter as consumption increases, it will probably still be lower than other years at that time period."
Still, some factors could drive heating costs up, such as geopolitical events (OPEC's next big meeting, for example, is scheduled for later this month) or a repeat of the transportation and pipeline issues that snarled fuel deliveries to some parts of the nation last year.
But the heating fuel industry appears to be working to avoid distribution issues this year. The National Propane Gas Association (NPGA), quoting EIA numbers, says the U.S. currently has 18 million barrels of propane in storage, a 29 percent increase compared to last year.
"In the states with the highest propane usage, the industry added storage capacity over the summer and worked with customers to fill tanks prior to the heating season," Mollie O'Dell, the NPGA's director of communications, told CBS MoneyWatch.
"The heating season has started," said O'Dell, "and the propane industry is well positioned to continue safely serving our customers with the fuel on which they rely."
As the winter season begins in earnest, some heating oil distributors seem cautiously optimistic.
"These prices this year, who knows where they're going to end up," Dennis O'Leary, of Noar's Oil in Worcester, Mass., told CBS affiliate WBZ NewsRadio 1030 on Friday.
"Hopefully, they stay down, and everybody enjoys it through the winter," he continued. "Really, supply and demand is going to determine that and what kind of winter we end up having."
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