Americans will pay significantly more to heat their homes this winter, as what is turning into a global energy crisis envelopes North America.
According to the US Energy Information Administration (EIA), American families will see their utility bills sharply accelerate this coming winter, as global energy prices continue to reach record highs, particularly in Europe and Asia. Households are projected to spend about $746 to heat their dwellings with natural gas this winter, up nearly 30% compared to last year. The agency forecasts that electricity spending— which will affect approximately 41% of American homes— will jump 6% year-over-year.
“The higher global and domestic energy prices that are resulting from economies beginning to grow again are going to translate into larger household bills for energy this winter,” explained EIA acting administrator Stephen Nalley. North America has thus far remained relatively immune to the astronomical price increases that are being witnessed across Europe and Asia, as countries rush to secure energy supplies ahead of forthcoming cold months.
Wholesale natural gas prices are currently sitting at around $5.70 per million Btu at the time of writing, while European gas prices have been soaring to record-highs above $30 per million Btu. Rising fuel costs have even caught the attention of the Biden administration, which has urged major oil producing nations such as Saudi Arabia to boost output in an effort to subdue rising oil prices.
In the meantime, shale energy companies, which account for nearly the entirety of gas and oil production in the US, have refrained from increasing output despite crude prices rising by nearly double over the past 12 months. The EIA expects that total US oil production this year will hit around 11 million barrels per day, which is significantly below previous forecasts.
Information for this briefing was found via the EIA. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.