The government issued its short-term energy outlook yesterday, full of good news for consumers: lower prices at the gas pump, a drop in natural-gas costs to heat homes, and less expensive outlays for home heating oil.
The recent downward trend in energy costs should continue for the most part through the end of 2016, according to projections by the U.S. Energy Administration.
The decline is driven by a variety of factors, including plentiful supplies of natural gas and oil; total U.S. oil output this year is expected to be the highest since 1972, even though the agency forecast crude oil production to decline because of low oil prices.
For motorists, that should result in the pump price falling to a national average of $2.03 a gallon by December, according to EIA officials.
“Reduced gasoline demand following the peak summer driving season, along with the switchover to lower-cost winter-grade motor fuel will help push gasoline prices lower during the remainder of 2015,’’ said EIA Administrator Adam Sieminski.
The agency projected U.S. regular gasoline retail prices to average $2.38 per gallon in 2016, a slight increase from the end of the year, but still below the average $2.64 per gallon drivers nationwide were paying in August. This past Labor Day weekend motorists paid the lowest price for gasoline during heavily traveled holiday in 11 years.
The outlook for natural gas is equally promising, with inventories at the end of October — the traditional injection season (when natural gas is piped into underground storage) for the coming winter-heating months — the third highest end-of-October level on record.
With new supplies of natural gas found in Pennsylvania and neighboring states, consumers here in New Jersey already have seen heating costs using the fuel tumble the past few years. This year will repeat that trend.
“U.S. natural gas production will increase and natural gas prices will be relatively
low at least through the end of 2016,’’ Sieminski said.
The New Jersey Board of Public Utilities is scheduled to vote on rates for the state’s four gas utilities at its monthly meeting tomorrow in Trenton. If adopted as proposed by the companies, prices will drop by up to 14.3 percent.
“Any drop in utility rates is welcome news for consumers,’’ said Ev Liebman, associate director of AARP, noting that New Jerseyans still have high utility rates and a high cost of living.
“Any drop helps folks, particularly those living on fixed incomes so they can stay in their homes and their communities where they prefer,’’ Liebman said.
Those who using heating oil to keep warm in the winter will also see prices drop, according to the EIA, which forecast the cost of the fuel to be on average $2.73 per gallon, a $1.01 decline from the previous season.