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This Winter Could be Colder, More Expensive

Colder temperatures and lower domestic oil production could send heating bills soaring.

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The Energy Information Administration recently unveiled its Short-Term Energy Outlook. Highlights are listed below, with a full version of the forecast available here.

  • Forecast average household expenditures for heating oil, propane, and natural gas are 38 percent, 26 percent, and 22 percent higher than last winter, because of colder weather projections and higher fuel prices.
  • Natural gas expenditures this winter are forecast to be similar to the five winters prior to last year.
  • Electricity expenditures are forecast to see a five percent increase over last winter.
  • U.S. crude oil production averaged 9.4 million barrels per day (b/d) in 2015, and it is forecast to average 8.7 million b/d in 2016 and 8.6 million b/d in 2017.
  • Brent crude oil prices are forecast to average $43/barrel (b) in 2016 and $51/b in 2017.
  • Isolated refinery outages and a disruption to the Colonial Pipeline system contributed to U.S. average retail regular gasoline prices increasing by four cents/gallon in September.
  • With a return to normal refinery and pipeline operations, the switch to less-expensive winter gasoline blends, and the typical seasonal decline in gasoline consumption, EIA expects gasoline prices to fall an average of $1.97/gal in January. Retail gasoline prices are forecast to average $2.12/gal in 2016 and $2.26/gal in 2017.
  • Global oil inventory builds are forecast to average 0.7 million b/d in 2016 and 0.3 million b/d in 2017.
  • EIA expects the share of U.S. total utility-scale electricity generation from natural gas to average 35 percent this year, and the share from coal will average 30 percent. Last year, both fuels supplied about 33 percent of total U.S. electricity generation.
  • Coal exports in July were 40 percent lower than in June and the lowest amount of coal exported in any month since February 2007. EIA forecasts U.S. coal exports will decline by 26 percent in 2016, and an additional five percent in 2017.
  • Although starting from a relatively low base, utility-scale solar generating capacity will increase 39 through the end of next year, the highest growth rate among sources of renewable electricity generation.

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