The latest version of the US Energy Information Administration’s monthly Short-term Energy Outlook was released today and there is some bad news and some good news. The bad news is that energy prices will remain around their current high levels; the good news is that the EIA doesn’t expect prices to increase.
In fact, the EIA estimates that heating a house will cost about 3% less this winter, due mainly to the warmer start to this year’s heating season. Heating oil costs are expected to rise by 8% this heating season and propane costs are expected to rise by 5%. But natural gas prices are expected to fall by 3% and electricity rates to fall by 2%, leading to the overall decline in heating costs.
Gasoline prices are now expected to average $3.53/gallon in 2011, compared with $2.78/gallon in 2010. The good news is that the price falls to an average of $3.45/gallon in 2012. Diesel fuel will cost $3.85/gallon in both 2011 and 2012, compared with $2.99/gallon in 2010. Global demand for diesel fuel is what is keeping the cost high, as US refiners produce more diesel fuel for export.
The average price for one thousand cubic feet (or one million BTUs) of natural gas is expected to average $4.02 in 2011, after falling to just $3.24/thousand cubic feet in November. In 2012, natural gas prices fall even further, to an annual average price of $3.70/thousand cubic feet.
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