Residential heating oil and propane prices are expected to be 12% and 10% higher, respectively, this winter than they were last winter, according to the U.S. Energy Information Administration.
The prices are already higher heading into the winter season than they were at the this time last year. Prices are expected to remain higher through March “as a result of higher crude oil prices, colder expected winter temperatures and lower fuel inventories than last winter,” according to the EIA. “Prices for U.S. petroleum products such as heating oil and propane tend to follow changes in Brent crude oil spot prices, the most widely used global benchmark price for crude oil.” Average Brent crude oil prices are projected to be $56 per barrel this winter, up from $51 per barrel last winter.
The majority of heating oil is consumed in the Northeast, and as of Nov. 24, distillate fuel oil inventories there have declined 31% to 37.7 million barrels, from the same time in 2016. Over the same period, U.S. propane inventories have fallen 27% to 73.2 million barrels.
EIA partners with state energy offices to collect state-level data on residential heating oil and propane prices through its State Heating Oil and Propane Program. The program collects data on heating oil and propane prices in 21 states. It collects only propane price data in 13 states, including Arkansas. Last year, the program started to include wholesale propane prices for 10 states, including Arkansas, and the data is provided by the Oil Price Information Service. Before 2016, the program included wholesale propane prices for 16 states.
In Arkansas, the residential propane price has risen 15% to $2.19 per gallon for the week of Nov. 27, from $1.90 per gallon at the same time in 2016. Over the same period, the wholesale propane price has risen 76% to $1.20 per gallon, from 68 cents per gallon.