EIA Predicts Cold Winter will Cause Heating Bills to Increase 19%

The Energy Information Administration has compiled a report that suggests US households should expect their energy bills to be higher this winter due to the forecast of colder temperatures than normal, especially in the Northeast, which will lead to a higher demand.

The report said that households with heating oil systems should expect to see their winter fuel bill, from October 1st to March 31st, rise by 19 percent, whereas those houses with natural gas will pay an extra 15 percent.

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Adam Sieminski, an administrator from the EIA, put it very simply; “it is going to be colder than last year and as a result of that, heating bills are going to be higher.”

“There has been a trend towards warmer weather so if we end up with somewhat above normal temperatures rather than just slightly below, that would reduce fuel oil needs and presumably would lead to better balance in the markets and somewhat lower prices.”

80 percent of US households that rely on the more expensive option of heating oil are situated in the northeast where the coldest weather is forecast. This has led the EIA to predict that those households will spend an average of $407 more on heating oil this winter than in the past.

It is possible that these higher energy costs could hurt President Obama’s re-election chances by putting further economic pressure on voters.

By. Joao Peixe of Oilprice.com