EIA Ticks Up Heating Oil Price Projections
Heating oil users gave a collective groan on Tuesday, when the Energy Information Administration (EIA) raised its forecast for the price of heating oil this winter. The EIA now predicts residential heating oil will sell for an average of $3.17 a gallon this season.
That amounts to a 4-penny increase per gallon—or an extra $10 to fill a 250-gallon tank—from the projections the EIA made a month ago. If the current numbers stand, households will be paying 34 cents more a gallon than they did last winter.
So what happened? The price for a barrel of crude has been on a two-year hot streak, rising with recent action overseas.
At the end of November, the euro stabilized on news of the Irish bailout, goosing oil prices. Meanwhile, analysts at JP Morgan called for demand in emerging economies (read: China) to push a barrel of crude to $120 before the end of 2012.
There has also been some fretting over potential heating oil shortages in Europe, which has been hit by a one-two punch of chilly weather and supply disruptions.
On Tuesday, the British pop star Lily Allen took to Twitter to vent about running out of heating oil. “My tank is completely out of oil, and my supplier says they’re two weeks behind,” she tweeted. “Oh God, no hot water at all.”
But most Americans can enjoy hot showers. Domestic supplies are above their historic average, according to the latest EIA data.