Slide 21 of 25
Notes:
- The low stock forecast adds some extra pressure to wholesale margins, but crude price is the major factor holding prices up this winter.
- The current EIA forecast shows residential prices peaking at $1.15 and averaging $1.14 this winter. The average retail price is about the same as last winter, but last winter included the price spike in January and February. In the Northeast, some consumers paid over $2.00 per gallon during the spike.
- Underlying crude oil prices are not expected to change much from this year to last. WTI averaged about $26.70 last winter, and is currently forecast to be roughly the same price this winter.
- While a brief cold snap was a factor behind last year’s price spike, the winter as a whole was almost 9% warmer than normal in the Northeast. If we have a normal winter this year, consumers will be buying more heating oil than last year.
- What is not shown is, if stocks remain low throughout the winter, supply disruptions or unexpected demand surges from cold weather could trigger another price spike similar to that seen last winter.
