Frigid temperatures may be costing the economy billions, but they’re putting hundreds of dollars back into the pockets of homeowners thanks to lower prices for home heating oil.
The average household that uses heating oil as its primary source of warmth will pay $1,645 in heating bills this season, down more than $710 from last winter, according to the U.S. Energy Information Administration.
Heating oil prices averaged $3.29 per gallon this week. That’s 10 cents higher than last week, but 94 cents less than at this time last year.
With prices at nearly a dollar less per gallon than last year, consumers can afford to pay for the additional fuel needed to keep the cold at bay. Through the end of February, the number of heating degree days – a measurement that reflects the strength of energy demand for home heating – among customers this winter season is 4.76 percent higher than normal and a half a percent higher than last year, according to the Energy Management Institute.
That number is going to pop higher after this weekend’s winter storms. But it won’t be enough to negate the heating oil savings thanks to low prices, says EMI partner Dominic Chirichella.
Normally, saving more than $700 per household would be a boon to the economy, but the same frosty weather that’s pushing up oil demand is also keeping consumers from going to work or going out to spend money, says Paul Corby, senior vice president at business weather intelligence company Planalytics. The firm pegs the cost of this winter’s storms at $10 billion.
Some analysts expect volatility in oil prices in the next few months, with an overall upward trend. There’s good news here, too: Meteorologists predict an upward trend in temperatures.
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