Northeast rationing heating oil as already high cost of oil is expected to become even higher

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Heating oil company warns ‘perfect storm’ coming this winter unless supplies are replenished
  • Oil executive Sam Livieri issued a stern warning to Americans on the ability to heat their homes as winter draws closer. Livieri said Tuesday that with a low supply of heating oil, the country could see a “perfect storm,” particularly in New England.
  • States in the Northeast are reportedly already rationing heating oil as prices rise.
  • Livieri said prices are roughly 40% higher than in 2021 and are expected to skyrocket when demand reaches its peak in the winter months.
  • Livieri said the high costs are “detrimental,” particularly for the elderly and people on fixed incomes. A 275-gallon tank, he estimated, currently costs consumers more than $1,100 to fill.

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U.S. home heating bills seen much higher this winter, EIA says

(Reuters) -U.S. consumers will spend more to heat their homes this winter (October-March) than last year due mostly to higher energy commodity prices, the U.S. Energy Information Administration (EIA) projected in its Winter Fuels Outlook on Wednesday.

Households that use propane and heating oil will likely spend much more than last year, EIA said.

EIA said it based its cost estimates on expectations of high retail energy prices — many are already at multiyear highs — and on forecasts for slightly colder weather this winter boosting household energy consumption over last year.

Last year, many energy prices reached multiyear lows due to coronavirus demand destruction. The wholesale price of natural gas, the most used heating fuel in the United States, averaged just $2.11 per thousand cubic feet (mcf) in 2020, their lowest in 25 years.

The main reason wholesale prices of natural gas, crude oil, and petroleum products have risen is that fuel demand has increased from recent lows faster than supply, in part because of economic recovery after the pandemic, EIA said.

Depending on where in the country people live, EIA said residential costs this winter – residents’ costs are higher than wholesale prices – will rise to about $11-$14 per mcf for natural gas, about $2.50-$3.50 per gallon for propane, and almost $3.50 per gallon for heating oil.

That compares with last winter’s residential costs of around $10-12 per thousand cubic feet for natural gas, $1.50-$2.50 per gallon for propane, and $2.50 per gallon for heating oil.

EIA said it will provide more details when it releases its Short-Term Energy Outlook later Wednesday.

(Reporting by Scott DiSavino; Editing by Andrew Heavens and Jonathan Oatis)