The supply chain is still messed up. We know the holidays will be a drain due to inflation and empty shelves.
Now the U.S. Energy Information Administration (EIA) predicts we will pay over 30% more on heating than we did last winter.
The EIA analyzes the four main heating fuels: natural gas, electricity, propane, and heating oil. The predictions are good from October to March:
Retail energy prices for several fuels are already at their highest point in several years. Although price increases over the past year can be attributed to several factors, 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 first year of the COVID-19 pandemic. To varying degrees, these increases in wholesale prices are being passed through to consumers.
Changes in wholesale propane and heating oil prices pass through to retail prices much more quickly than changes in wholesale natural gas or electricity prices pass through to customers’ rates. In addition, many propane and heating oil users buy supplies before winter and refill as needed. When forecasting expenditures, we assume the consumer’s cost for the fuel is the retail price at the time they use the fuel rather than the actual purchase price.
Electricity heats up the majority of houses in America. That source will only go up by 6% this winter.
Only 9% of the houses use propane or heating oil, but those people see the biggest increase. This happens because those price changes “pass through much more quickly to consumers” unlike electricity and natural gas.
Public utilities like electricity and natural gas must have their price increases approved.
Propane and heating oil goes straight to the market.
“Residential energy consumption in our forecast relies heavily on weather expectations, which we base on the National Oceanic and Atmospheric Administration’s (NOAA) most recent forecast of how cold a winter it will be, using heating degree days as the measure,” wrote the EIA. “Heating degree days reflect temperature deviations from a base temperature of 65 degrees Fahrenheit, and more heating degree days indicate colder weather.”
The officials predict we will have 3% more heating days than last winter.
I thought the climate change everyone talks about meant the earth was getting warmer.
Does everyone know where the closest Federal Reserve branch is to them? You might want to look that up. https://t.co/OX1AaNT7Lj
— Rudy Havenstein, dumb tweets for smart people. (@RudyHavenstein) October 13, 2021
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