It won’t matter how you heat your home, this winter is going to be expensive due to massive inflation in propane, heating oil, coal and natural gas, according to the U.S. Energy Information Administration (EIA).
Propane Prices Heading Higher
Those living in rural areas tend to rely on propane for winter heat, cooking and hot water. The newest report from the EIA shows wholesale propane has increased in price by more than 150% to $1.63 per gallon from just $0.63 per gallon a year ago.
Not all of that cost has worked through to the residential market yet as winter refills haven’t started in earnest, but some of it has. Residential prices rose from $1.78 per gallon on average a year ago to $2.59 now. That’s a 141% increase.
Heating Oil to Get More Expensive
Residential heating oil is also getting much more expensive, which is mainly used in the northeast. Distillates have risen 67% over year-ago prices going from $2.13 per gallon to $3.17.
Heating oil and propane have another problem – the supply-demand curves look awful. Propane and heating oil stocks are now below their 5-year averages and demand is increasing faster than supply. By the time winter refill orders hit the peak, prices could be triple what they were under the last administration.
Natural Gas Prices Spike
Natural gas futures are set to reach a 12-year high as global shortages raise prices encouraging U.S. producers to export. The result is higher prices at home.
Belief that the United States will have enough gas in storage for this winter and a lack of capacity to export more LNG has kept U.S. prices from rocketing to the record levels seen in Europe and Asia. However, pipeline constraints and competition for expensive LNG exports were expected to boost prices to multi-year highs in California and New England this winter.https://www.foxbusiness.com/economy/u-s-natgas-futures-on-track-for-12-year-high-as-global-prices-soar
Asian demand for coal, while the U.S. has curtailed supply, has caused prices for a common electric plant fuel to skyrocket. Natural gas and coal are still widely used in U.S. electricity generation and will result in higher electricity prices this winter.
And for those hoping that using wood to heat will save them? You do remember that lumber is scarce and extremely expensive. Lumber comes from the same trees that firewood does. So unless you have your own lot of trees to cut down, that’s going to be more expensive this year too. (Related: Builders Running Out of Construction Materials)
It doesn’t matter how you heat your home, things are going to be more expensive this winter.
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