Posted on 09/29/2006 8:58:29 AM PDT by Graybeard58
WASHINGTON -- After years of relentlessly rising heating bills, homeowners are likely find some relief this winter. Supplies are plentiful, and prices are falling for natural gas, heating oil and propane.
The cost of natural gas on wholesale markets is about half of what it was last January because of high inventories and the anticipation of record amounts in storage by the time the heating season begins in November.
"There is good news for consumers going into this winter. For the first time in four years we're seeing downward pressure on prices," Chris Conway, chairman of the Natural Gas Supply Association, said at a news conference Thursday.
The trade group represents natural gas producers.
Gas is the most widely used source of fuel for residential heating in the country especially across the Midwest.
Fuel oil, which is used heavily in the Northeast, also has seen dramatic price cuts in recent weeks as crude oil prices have declined and inventories of the fuel have increased. Propane prices also have dropped amid substantial supplies, according to the Energy Department.
But government analysts and industry executives cautioned that weather remains an unknown. If the winter turns unusually cold, heating prices again could jump.
Another major factor could be the cost of crude oil, which has fallen by one-fifth since reaching a brief high of $78.40 a barrel on July 14. That has seen the wholesale price of fuel oil drop by about 40 cents a gallon since early August.
The price of $1.58 cents a gallon for fuel oil on the spot market last week was 32 cents cheaper than a year ago, according to the federal Energy Information Administration. The price has rebounded some in recent days to $1.66 a gallon on Thursday on the New York market.
Natural gas has seen an even sharper decline.
Traders paid $4.32 per thousand cubic feet Thursday on the spot market, about half of what gas was selling for last January and a third of what it cost a year ago in the aftermath of Hurricane Katrina. The price for November delivery on Thursday slid nearly 13 cents to $5.54 a thousand cubic feet. And prices could decline further.
"At this point I don't see a bottom for natural gas," said Tom Bentz, an analyst at BNP Paribas Commodity Futures in New York. But he too cautioned an early cold spell could scare the market and cause prices to reverse.
It's too early to predict how the current wholesale price drops will translate into the price consumers will pay four months from now in the heart of winter. Consumers may not see all of the benefits of the recent price drops.
Daphne Magnuson, a spokeswoman for the American Gas Association, said many utilities began buying their gas six months ago when prices were higher, not anticipating such a dramatic decline, and put it into storage. Those higher costs will be reflected in the retail price this winter when the gas is used, she said.
IBTBF!
IBTRYMB!
LOL!
IBMIBP
Why on earth is the AP publishing this before the election?
IBTBF! =)
Right. In the depths of last winter, we paid $3.00/gallon for propane. The tank was filled last week and the bill arrived yesterday. $2.75/gallon.
I think the dealer we use must need a new yacht. We have a rental tank, so 15 cents/gallon of the price is tank rental, but even so, the prices seem high to me. (Northern Virginia area.)
Jack
Sometimes I really miss Willie Green...
Nat Gas is up 10 cents today and futures for Dec and beyond have not declined anything near to what the Oct contract did.
Still too high. Another good reason for me to live in San Diego. Costs about $100 a year to heat the house with my pellet stove.
I already predicted a lower heating bill for myself this winter; I just moved from Delaware to Florida!
We only use propane for the grill and those prices have not seemed to change at all, though I didn't ask my husband what he paid last weekend.
I'll be watching fuel oil prices, as we are going to need a delivery within the month, the last time we got a delivery it was $2.87 (I think), but that was last November. We used the woodstove as our major heat source last winter, but we still need the oil for hot water.
We're on the Eastern Shore, and gas prices have not been dropping as quickly here as in other parts of VA. My husband works in VABeach/Hampton and has been paying 30cents a gallon less down there than here for several weeks now.
What does your property taxes cost and gasoline to drive to work? California may have some benefits but cost-of-living isn't one of them.
ROFL!!!!! I can think of worse reasons for leaving Delaware :) OTOH, I don't think there is ever a bad reason for leaving Delaware, we did it 3 years ago.
A lot of customers probably pre-bought, and a lot of dealers probably also pre-bought, in order to protect themselves.
So it's hard to predict what the actual prices will be. We may all get shafted this winter regardless, and it won't necessarily be the dealers who make a bundle. More likely it will be the lucky futures traders who went short.
On August 15th the NYMEX Nat Gas futures for December delivery was $9.94 it is now $7.18. Heck on August 15th the Nat Gas for October was about 8.80 and it closed at 4.20
I can't speak for property taxes since I rented in Delaware, but I'm in the process of buying a house in Pinellas Park. Taxes don't seem all that outrageous. Gas is about $2.15 here and I have a 25-mile round-trip commute. Not too bad, mostly on the bridge over to Tampa.
I'm sorry zoso82t, I missed my target. I was aiming for the post above you talking about the low heating cost in California. Swing and a miss...
rangerX, would you care to comment on post #16
However, I wouldn't want to try to live here if I had to buy a house today. It would be prohibitively expensive. The two things that are way out of line costwise in San Diego as compared to the rest of the country are housing and gas.
We just moved and so I went and set up the rental on the tank at the new place. I've rented tanks from three different companies here in north GA and all have a set price for tank rental that comes due once a year. The tank rental was 40 bucks, the last place was 38. I hadn't seen one that adds a rental price to their fuel rate.
As for propane, they told me the current price was 1.89. I don't know what the delivery surcharge with this new company will be, I forgot to ask, but the last place was fifteen bucks.
The company we deal with charges 15 cents per gallon tank rental, and a minimum of 600 gallons/year usage (going from memory here, so the numbers could be a bit off). If you don't use 600 gallons, they send a bill for the difference in rental.
Next spring, I'm finding a new propane service, and I'll purchase a tank so that it's possible to switch suppliers.
Prices in general are higher up here than GA, but there should not be $1/gallon difference.
Jack
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