U.S. households that mainly use heating oil to warm their homes should pay 19 percent more for it this winter compared to a year earlier, as low distillate stocks and new fuel regulations drive up prices, the Energy Information Administration said on Wednesday.
The roughly 6 percent of U.S. homes that rely on the fuel will pay an average of $407 more this winter, according to the government agency’s Winter Fuels Outlook. About 80 percent of all U.S. homes that use heating oil are in the Northeast.
The report said low inventories in the U.S. East Coast and Gulf Coast, as well as new low-sulfur diesel regulations for New York state, would tighten the market for distillates. Such fuels include heating oil and diesel.
The EIA said 17 percent of the cost increase would be due to higher consumption, while 2 percent would be based on elevated prices.
Mild weather limited heating fuel consumption last winter. The EIA based its pricing assumptions on near-normal temperatures for this winter.
Natural gas consumers, which account for about half of U.S. homes, should expect to pay 15 percent, or $89, more than last winter, due primarily to forecasts of higher consumption.
Residential natural gas prices for the Northeast are seen rising by 4 percent during the winter months, while in the South prices are seen declining by 3 percent, according to the EIA forecast.
(Reuters) – (Reporting by Matthew Robinson in New York; Editing by Dale Hudson)