EIA: 2010-2011 Heating Season Most Expensive Ever for Heating Oil Users
This heating season is shaping up the be the most expensive on record for heating oil users, according to the Department of Energy’s Energy Information Administration (EIA). The EIA’s latest edition of This Week in Petroleum, released on Wednesday, predicted that the current heating season would see the highest spending ever by heating oil users. Even though more than a month remains in the 2010-2011 heating season (defined as October through March by the EIA), heating oil prices have so far been much higher than predicted by the EIA (or anyone else). The agency reported that by Groundhog Day, the average heating oil user has consumed two-thirds of their seasonal total.
The EIA’s latest prediction for the average total expenditure on heating oil this season of $2,431 is $231 higher than the agency’s first forecast of the season in October and $485 higher than last season’s average total. According to EIA analysis, this season’s high heating oil prices are not a result of supply and demand, but rather unexpectedly high crude oil prices.
The EIA data confirms a frustrating reality about the current heating season: despite more-than-ample domestic supplies of heating oil, its market and retail pries have been climbing steadily for months. While increasing crude oil prices do partially explain heating oil price gains, recent instances of crude prices falling while heating oil prices shoot higher show that other forces are at work. Whether those forces are price manipulation by speculators or some other behind-the-scenes machination remains a mystery.