Get ready: heating bills could rise 30% this year

Thermostat stock image.
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Heating bills for homes that use natural gas in the U.S. are expected to spike 30% this winter, according to the U.S. Energy Information Administration.

In a press release issued Thursday, the EIA said that natural gas households – close to half of the homes in the U.S., according to the Associated Press – will see an increase in costs along with a 6% jump in electric heating, a 43% jump in heating oil prices and a 54% jump in propane costs compared to last year.

Electric heat accounts for 41% of households in the nation, oil accounts for 4 percent and propane accounts for 5%, the Associated Press said.

“In its Winter Fuels Outlook, EIA forecasts an increase in average heating prices this winter for all regions of the United States and all heating fuels under a wide variety of weather conditions,” said the EIA release.

While fuel costs rise, the National Oceanic and Atmospheric Administration also expects a slightly colder winter than last year, which could lead households consume more heat.

“As we have moved beyond what we expect to be the deepest part of the pandemic-related economic downturn, growth in energy demand has generally outpaced growth in supply,” said EIA Acting Administrator Steve Nalley. “These dynamics are raising energy prices around the world.”

He explained that higher prices both nationally and globally are related to counties growing again in the wake of the continuing COVID-19 pandemic.

“Low natural gas inventories in the United States and Europe make our price forecasts very uncertain, because a severe cold snap could lead to significant price effects,” Nalley added.

Brent crude oil prices averaged more than $80 per barrel this month October, a nearly seven-year high, according to the EIA. Hurricane Ida reduced U.S. oil production and OPEC+ announced it would stick to its plan of increasing crude oil production by 400,000 barrels per day this November.

According to EIA estimates, Brent crude oil will average $81 per barrel for the remainder of 2021, $10 higher than its previous estimate.

“We expect U.S. crude oil production to ramp up in 2022 as tight oil production rises, which should help moderate prices from this level next year,” Nalley said.