The combination of warmer-than-normal winter weather and low commodity prices will continue to pay dividends to consumers when it comes to paying their energy bills.
In a monthly short-term outlook by the Energy Information Administration, lower prices are generally projected for filling your gas tank, heating your home, and keeping the lights on.
The decline is forecast even though crude-oil production is expected to continue to drop amid cutbacks in exploration and drilling activities by energy companies because of low prices, according to the outlook.
But production in the Gulf of Mexico is on track to steadily rise, the outlook said. In part, that is because oil production there is less sensitive to short-term movements in crude prices since companies are committed to completing complex offshore oil projects once they begin.
That trend means lower prices at the gasoline pump. “After paying the lowest Thanksgiving prices in seven years, U.S. drivers will continue to save money at the pump through December as low crude oil prices keep downward pressure on motor fuel costs,’’ the outlook said.
In some parts of the country, gasoline is already selling for less than $2 per gallon, and those prices are expected to drop this month, according to the outlook.
“The effect of lower crude-oil prices, along with the potential for above-normal temperatures, is spilling over to lower residential heating-oil expenditures, as the average household using home heating oil should save almost $600 this winter,’’ the outlook said. The average price for home heating oil is $2.67 per gallon this winter, a steep drop from the $3.72 consumers paid last winter.
For households using natural gas, the cost of heating a home this winter is expected to run 13 percent below last winter, according to the outlook. In New Jersey, consumers already are seeing those lower prices with utilities offering credits to customers on their heating bills because of the decline.
The agency expects natural-gas prices to rise through the early part of 2016, however, because temperatures will likely get colder, according to Tim Hess, an analyst for the outlook.
“Generally, we see consumers with natural gas having lower costs than those using heating oil and propane,’’ Hess said.
The low natural-gas prices also are expected to stabilize and some cases lower electricity costs as more power producers rely on the fuel to run their generating units. The one exception is the upper Northeast where constraints on moving the natural gas should lead to higher prices, Hess said.
The monthly outlook reflects projections made by the EIA in September when it issued its annual winter outlook on energy.