Since the oil "super spike" began, $4 gas has been in the forefront of most Americans' minds. But that's just because they haven't seen what $100+ oil will do to their home heating bill. The US Energy Department spells that out:
- Heating oil users will pay $2,644 on average to heat their homes this winter, up 36.3% from last year.
- Homeowners with natural gas, the most popular heating source in the USA, will pay $1,059, a 23.8% increase.
If those predictions hold true, Mark Zandi, chief economist at Moody's Economy.com, estimates that US homeowners will spend an additional $22 billion to heat their homes this year. Accroding to Zandi, that extra oil money translates into a roughly 0.3% drop in GDP.
While it's possible that a recent natural gas drilling boom may alleviate the pain of some consumers, it's also possible these estimates are too low. The numbers above are calculated based on a winter warmer than the average from 1971-2000. Yet the Farmers' Almanac, which claims an accuracy rate of 80-85% for forecasts that are prepared two years in advance, says this year, "numb's the word". The publication predicts below-average temperatures for most of the US. Get ready for a cold winter or a light checkbook -- or both.
See Also:
Natural Gas Supply Booms And Prices Crash: Is Oil Next?
Reduced US Oil Consumption Means MORE Dependence On Middle East
