After years of relentlessly rising heating bills, homeowners are likely to find some relief this winter. Supplies are plentiful, and prices are falling for natural gas, heating oil and propane.
"There is good news for consumers going into this winter. For the first time in four years we‘re seeing downward pressure on prices," Chris Conway, chairman of the Natural Gas Supply Association, said at a news conference Thursday.
Gas is the most widely used source of fuel for residential heating in the country especially across the Midwest.
But government analysts and industry executives cautioned that weather remains an unknown. If the winter turns unusually cold, heating prices again could jump.
The price of $1.58 cents a gallon for fuel oil on the spot market last week was 32 cents cheaper than a year ago, according to the federal Energy Information Administration. The price has rebounded some in recent days to $1.66 a gallon on Thursday on the New York market.
Traders paid $4.32 per thousand cubic feet Thursday on the spot market, about half of what gas was selling for last January and a third of what it cost a year ago in the aftermath of Hurricane Katrina. The price for November delivery on Thursday slid nearly 13 cents to $5.54 a thousand cubic feet. And prices could decline further.
It‘s too early to predict how the current wholesale price drops will translate into the price consumers will pay four months from now in the heart of winter. Consumers may not see all of the benefits of the recent price drops.
Neil Gamson, an analyst at the Energy Information Administration, said it‘s too early to predict what residential heating costs will be, although looking at today‘s wholesale prices there‘s room for optimism. Still, those numbers also might be misleading, said Gamson.
The biggest wild card remains the weather, says Conway, the NGSA chairman and ConocoPhillips executive. If there is an early cold spell it could drive up prices.
But then, the warmest January on record brought down demand and tempered some of the expense for consumers.
Still, heating costs have been on the rise for a succession of winters.
According to EIA figures, the average winter heating bill for a home using natural gas was $465 in 2001-02, increasing each year to $944 last winter. For those homes using fuel oil, the cost has increased from $627 in 2001-02 to $1,429 last winter, again increasing each year. Users of propane paid $736 in 2001-02, compared to $1,236 lasts winter.
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