Natural Gas Versus Home Heating Oil For Winter 2016-2017

When the days and nights begin to cool down and there is an overall chill in the air, we know that winter is just around the corner. This is the time of year when homeowners begin preparing for the upcoming cold season by weatherstripping doors, sealing windows and giving their heating system a fall tuneup. Knowing how to budget for the upcoming home heating costs can present a difficult challenge for homeowners. In this article, we will discuss some points that homeowners should be aware of for the 2016-2017 winter, especially those using natural gas as a fuel source.

When trying to determine what to expect out of the upcoming winter, we should first see what the experts are predicting so that we can be accurately prepared for the season just ahead. For those homeowners using natural gas, you should be aware that the experts are predicting heating costs associated with natural gas to rise. In addition, the possibility of gas interruption during the coming winter season exists, which could leave homeowners without heat at some point over this winter. The American Energy Coalition discusses the rising cost of natural gas in the following article:

Strong demand has driven natural gas prices to their highest point in 20 months, and traders are finding encouragement to bet on higher prices ahead, according to a recent Wall Street Journal article.

“Historic heat has caused record demand for gas-fired power at a time of declining supply growth, persuading many to bet that the [natural gas] glut will ease and lift prices just ahead of the high-demand winter-heating season,” The Journal wrote. “That could cause prices to keep shooting higher if winter produces strong demand.”

“The United States must grow supplies from a virtual standstill at the present time and begin a sharp acceleration by the early 2017 at the latest, if it is to avoid major shortfalls in storage by the end of March,” FirstEnergy Capital Corp. in Calgary, said in a note to clients quoted by The Journal. “It expects prices to rise steadily from mid-October.”

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There is no doubt that homeowners using natural gas will be paying more to heat their homes this winter. In addition, the weather experts are predicting that, when compared to last year, this winter will be longer and colder in the eastern U.S. Thus homeowners will face a colder winter coupled with a rise in gas prices. The article also discusses storage shortfalls, which is an indication that there may not be an adequate supply of natural gas to keep going without interruption through the winter.

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Cold Winter Predicted

Obviously, the weather is a major factor in the amount of natural gas needed to heat your home. Short, mild winters mean that homeowners enjoy lower heating bills. Also, the demand for natural gas is reduced. However, the opposite also holds true. Long, cold winters mean an increase in heating cost along with a greater demand for natural gas. The following article discusses what Farmer’s Almanac is predicting for the upcoming winter season:

While winter officially starts on December 21, 2016, the Farmers’ Almanac predictions point to some snow and cold conditions in mid-November in the Northeast, Great Lakes, and Midwest.

Get the snow blowers ready in the East and umbrellas in the West! An active storm track will deliver above-normal precipitation to the Southeast, Northeast and New England states throughout most of the winter, especially February.

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Wall Street Journal also published an article discussing the weather outlook for the upcoming winter season:

Commodity Weather Group LLC in Bethesda, Md., this week updated a cold winter outlook with even colder temperatures, the article states. “Nearly the entire eastern half of the country is likely to get temperatures averaging 2 to 3-degrees-Fahrenheit-below normal in November, it said. Extreme cold is likely to linger in some parts of the North through March, pushing the need for heat up 8.2 percent over the 10-year average, by the metric of heating-degree days.”

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In comparison to last year, the heating costs for homeowners using natural gas are predicted to be much greater. The reasoning behind this prediction is due to both the cold winter that is expected as well as the projected increase in natural gas prices. In addition, the increased demand for gas will place upward pressure on the price of gas this year.

Abundant Heating Oil Supplies

The supply of heating oil is abundant with no expected shortages, and homeowners who use fuel oil as a heat source will not experience the same shortage that natural gas users are expected to face this winter. Even though this winter is predicted to be colder which leads to an increase in home heating costs for all of us, homes heated with fuel oil will be better positioned than those heated with natural gas. One of the biggest reasons for this is because oil dealers will not have to deal with “interruptibles”, or a shortage in supply because of outpacing demand. A recent article in Fuel Oil News discussed this in greater detail:

The abundance of inventory is due to the fact that the U.S. has been producing very large quantities of crude oil, Levine said. Even though U.S. crude oil production has fallen by roughly one million barrels a day, “we’re still producing a huge amount of supply,” Levine said. Further, “demand has been very strong, encouraging refiners to continue to create more product,” Levine said. “but I want to point out that eight and a half million barrels a day production is still a lot of production.”

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Those homeowners using heating oil as their home heating fuel source this winter will not experience a shortage. In addition, homeowners are able to lock in the price they will pay for fuel oil right now to further reduce costs. Heating oil homeowners should order their home heating oil now for the best price.

You can better prepare by having an idea of what’s to come. For affordable, reliable, and professional heating oil delivery service, be sure to contact R. F. Ohl.  Contact us to find out more on our fuel oil delivery options.

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