How much you think you will have to pay for heating your house?
If you guessed it’s going to be higher then what you were paying last winter, you guessed correctly.
According to the weekly report made by the EIA (The Energy Information Administration) which was published on Wednesday, November 10th, there is an expected rise in costs for US household heating due to a rise in Propane Prices. According to the report, the heating cost will rise by nearly 8% compare to last winter, i.e. the cost will be 1,947$.
This figure is a bit misleading as there were two opposite direction effects occurring that comprise of the total percent rise:
- The average household consumption is expected to drop by 4.5%, from 768 gallons (on average) to 803 gallons in this upcoming winter.
- On the other hand, the Propane prices per gallon are expected to rise by nearly 13% from 2.18 $/g to 2.46 (on a US average).
- Therefore, the total increase in cost for a household will be “only” 8% (13%-4.5%=~8%), this rise is mainly due to the increase in the crude oil price.
In related to the propane, it seems that there was also a reduction in the inventories due to the excess usage of it in the Northeast and Midwest because of the cold front that hit these regions.
In regards to the Finished Motor Gasoline stock, which I have covered last week when The EIA issued its penultimate report, there is a continuous decline in the stocks and currently they fell below the 70 million barrels mark and are currently at 69.448 million barrels, an all time low. Again, it seems that it’s mostly due to backed up work of major refineries in the US, Canada and Europe. Furthermore, the total stocks of crude oil are at high levels of 1,092 million barrels, so this figure only reassess the claim that it’s not due to lack of crude oil but due to backed up work in the refineries.
Prices – As of November 12th
The crude oil price of futures for December 2010, as of 15.40PM GMT, on the New York Mercantile Exchange (Nymex), is at 85.72 USD per barrel, which represents a 2.09 dollar decrease or a 2.38% drop.
The WTI spot price settled as of 14.05PM GMT at 86.61 USD per barrel, a decrease of 1.37% compare to the previous day’s rate which is also a 1.2 USD decline.
The Brent spot crude oil prices reached 86.75 USD per barrel – a 1.72 USD or a 1.94% percent decrease as of 15.50PM GMT.
The Natural Gas prices also rallied a bit after it dropped yesterday and is now being traded, as of 15.40PM GMT, the Nymex Henry Hub Future price for December 2010 is at 3.92$ MMBTU(one million BTU) which is a 0.13% decrease or 0.01$.