{"id":85597,"date":"2022-12-01T17:04:00","date_gmt":"2022-12-01T21:04:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=85597"},"modified":"2022-12-06T15:34:17","modified_gmt":"2022-12-06T19:34:17","slug":"home-heating-prices","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/home-heating-prices\/","title":{"rendered":"Why Home Heating Prices Will Rise &#038; How to Prepare"},"content":{"rendered":"\n<p>Why are home heating prices expected to rise significantly this winter? How can you prepare for a fuel shortage?<\/p>\n\n\n\n<p>Disruption of the global supply and distribution of oil and natural gas will create shortages in heating fuel this winter. Europeans and Americans will face rising home heating prices, and they\u2019ll need to do everything possible to conserve fuel this year.&nbsp;<\/p>\n\n\n\n<p>Keep reading to learn why home heating prices are on the rise and how you can prepare for the winter.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-home-heating-prices-on-the-rise\">Home Heating Prices on the Rise<\/h2>\n\n\n\n<p>As fuel prices skyrocket due to disruption in supply, experts warn that <a href=\"https:\/\/www.npr.org\/2022\/09\/01\/1120457195\/europeans-brace-for-a-rough-winter-with-surging-gas-prices\" target=\"_blank\" rel=\"noreferrer noopener\">many around the globe could face a long cold winter this year<\/a>. Oil and natural gas markets are always affected by global factors, and this year the Russian invasion of Ukraine is exacerbating already-existing fuel supply shortages.&nbsp;While supply and distribution chains are still trying to recover from pandemic-related slow-downs, which had already increased home heating prices substantially since the winter of 2020-21, the Russia-Ukraine war will cause those costs to soar even higher this year.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-much-will-home-heating-prices-increase-in-the-u-s\">How Much Will Home Heating Prices Increase in the U.S.?<\/h3>\n\n\n\n<p>In the U.S., home heating prices are up 300% from just a few years ago, with <a href=\"https:\/\/www.cnn.com\/2022\/10\/12\/energy\/heating-costs\/index.html\" target=\"_blank\" rel=\"noreferrer noopener\">further increases predicted<\/a> for this year.<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Natural gas prices are expected to rise 28%, for an average winter heating expense of $931.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Electricity costs will rise at least 10%, for an average expense of $1,359 for the winter.\u00a0<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Oil is the most expensive heating fuel, and that cost is expected to increase 27%, for an average winter expense of $2,354.<\/li><\/ul>\n\n\n\n<p>Almost 90% of American homes use natural gas or electricity for heating, with almost all of the oil-heating systems being in homes in New England. So, <a href=\"https:\/\/www.bostonglobe.com\/2022\/10\/30\/business\/people-are-shocked-cost-filling-their-oil-tanks-winter-approaches\/\" target=\"_blank\" rel=\"noreferrer noopener\">New Englanders face the greatest threat<\/a> in the U.S., with Maine forecast to be in the worst shape, because it has the oldest average population and is most reliant on oil for heat.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-s-in-store-longer-term\">What\u2019s in Store Longer Term?<\/h3>\n\n\n\n<p>Unfortunately, the global fuel supply situation is <a href=\"https:\/\/time.com\/6226587\/energy-crisis-next-winter\/\" target=\"_blank\" rel=\"noreferrer noopener\">only expected to get worse<\/a>. Russian President Vladimir Putin is unlikely to reverse his position on fuel supply to Europe, and even if he\u2019s no longer in office by this time next year, there will be a period of political unrest in Russia. This means Europe is unlikely to be able to re-stock fuel reserves quickly enough to be prepared for next winter. As the wealthier European countries scramble to stock fuel supplies, the global price of oil and natural gas will be driven even higher, resulting in poorer countries being unable to afford it. This could result in major political upheaval across the globe as countries face regular blackouts.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">OPEC+ Cutting Oil Production<\/h4>\n\n\n\n<p>Adding to the issue of rising home heating prices, the <a href=\"https:\/\/www.reuters.com\/business\/energy\/opec-oil-output-drops-november-after-cut-pledged-survey-2022-11-30\/\" target=\"_blank\" rel=\"noreferrer noopener\">pledged oil production cuts by OPEC+<\/a> will likely drive up crude oil prices, with economic and political consequences in the U.S. and around the world.&nbsp;&nbsp;<\/p>\n\n\n\n<p><a href=\"https:\/\/www.opec.org\/opec_web\/en\/about_us\/25.htm\" target=\"_blank\" rel=\"noreferrer noopener\">OPEC is the Organization of Petroleum Exporting Countries<\/a>. It currently includes Algeria, Angola, Congo, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates, and Venezuela. Its mission is to maximize profit to its member countries from oil exports by coordinating oil production and policies.<\/p>\n\n\n\n<p>To maximize its members\u2019 profits, OPEC+ generally tries to keep the price of oil as high as possible without making it so high as to trigger economic recession (which would erode demand).<\/p>\n\n\n\n<p>Currently, <a href=\"https:\/\/www.macrotrends.net\/1369\/crude-oil-price-history-chart\" target=\"_blank\" rel=\"noreferrer noopener\">oil prices remain relatively high<\/a> in Western markets, but have decreased over the past three months due to the slowing economic recovery (and thus, slowing demand).&nbsp;<a href=\"https:\/\/www.usnews.com\/news\/business\/articles\/2022-10-06\/explainer-how-will-opec-cuts-affect-oil-prices-inflation\" target=\"_blank\" rel=\"noreferrer noopener\">OPEC+ is reducing production to compensate for the reduction in demand and drive prices back up.<\/a><\/p>\n\n\n\n<p><strong>Keeping oil prices high is particularly important for Russia<\/strong> (which is one of the prominent members of OPEC+) because sanctions have <a href=\"https:\/\/markets.businessinsider.com\/news\/commodities\/russian-oil-discount-asia-buyers-price-cap-sanctions-china-india-2022-8\" target=\"_blank\" rel=\"noreferrer noopener\">obliged Russia to sell its oil at discounted rates <\/a>to the remaining countries that are willing to buy it. The more they have to discount their oil, the higher the base price needs to be for them to make a profit.&nbsp;&nbsp;<\/p>\n\n\n\n<p>Western nations have imposed sanctions on trade with Russia in response to Russia\u2019s invasion of Ukraine, to reduce Russia\u2019s ability to finance the war.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Will This Cause Gas Prices to Rise?<\/h4>\n\n\n\n<p>Assuming that OPEC+\u2019s planned reduction in crude oil production by two million barrels a day succeeds in raising the price of crude oil, gas prices will also increase. This is because gasoline is made by refining crude oil, so <a href=\"https:\/\/www.thebalancemoney.com\/how-crude-oil-prices-affect-gas-prices-3306230\" target=\"_blank\" rel=\"noreferrer noopener\">the price of gas is basically the price of the oil plus the cost of refining it<\/a>, plus the cost of transporting it from the refinery to the gas station, plus taxes and any other fees involved in selling gasoline. Changes in the price of gas are driven mostly by changes in the price of oil, because the other costs don\u2019t usually change much over time.<\/p>\n\n\n\n<p>However, experts note that two factors may reduce the effect of rising oil prices on gas prices, at least in certain parts of the U.S.:&nbsp;&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>First, <a href=\"https:\/\/www.reuters.com\/markets\/us\/why-are-fuel-prices-rising-again-some-us-regions-2022-10-04\/\" target=\"_blank\" rel=\"noreferrer noopener\">a number of U.S. refineries have been shut down or running at reduced capacity for repairs<\/a> lately. A reduction in the supply of refining capacity has driven up the cost of refining, <a href=\"https:\/\/www.shortform.com\/blog\/increasing-gas-prices\/\">increasing gas prices<\/a>, especially in certain areas. As these refineries come back online, the cost of refining will come back down, reducing the price of gas and counteracting the increase due to rising oil prices. Experts expect this effect to be most pronounced in California, Washington, and the Midwest, based on the location of the affected refineries.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Second, OPEC+\u2019s <em>actual<\/em> production cuts may be smaller than the nominal figure because actual production in OPEC+ countries has been lagging below target production. While they reduced <em>target<\/em> production by two million barrels per day, <a href=\"https:\/\/www.wsj.com\/articles\/opec-agrees-to-biggest-oil-production-cut-since-start-of-pandemic-11664978144?mod=hp_lead_pos4\" target=\"_blank\" rel=\"noreferrer noopener\">the new target is only about 600,000 below current production.<\/a> If the supply of oil doesn\u2019t decrease as much, prices won\u2019t rise as much.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-can-you-do\">What Can You Do?<\/h3>\n\n\n\n<p>The most effective thing citizens can do to minimize the potential for crisis is to <a href=\"https:\/\/fortune.com\/2022\/09\/16\/how-to-lower-energy-bill-tips-soaring-costs\/\" target=\"_blank\" rel=\"noreferrer noopener\">lessen their fuel consumption<\/a>. With collective effort in this area, nations could reduce their demand and extend their supply. Here are some ways to reduce the price of home heating for your household:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Turn your thermostat down to 68 degrees or lower when you\u2019re home during the day, and to 60 degrees overnight.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Minimize heat loss around your doors and windows with draft stoppers and weather stripping. If you can\u2019t afford to replace windows, consider putting plastic over them on the inside.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Open your curtains or blinds to let the sun in during the day.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>If you can afford it, switch to electric heat, possibly even installing a solar system.<\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li>Upgrade to a newer more fuel-efficient furnace, and\/or be sure to have your current one maintained well.<\/li><\/ul>\n\n\n\n<p>Although some of these measures can be expensive, they\u2019ll pay off in the long run for you personally, and for the world. The more you can do to upgrade the current heating systems in your home, the smaller price you&#8217;ll pay when the crisis worsens in 2023-24.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why are home heating prices expected to rise significantly this winter? How can you prepare for a fuel shortage? Disruption of the global supply and distribution of oil and natural gas will create shortages in heating fuel this winter. Europeans and Americans will face rising home heating prices, and they\u2019ll need to do everything possible to conserve fuel this year.&nbsp; Keep reading to learn why home heating prices are on the rise and how you can prepare for the winter.<\/p>\n","protected":false},"author":19,"featured_media":85607,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7,31],"tags":[727],"class_list":["post-85597","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","category-money","tag-articles","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why Home Heating Prices Will Rise &amp; How to Prepare - Shortform Books<\/title>\n<meta name=\"description\" content=\"Why are home heating prices becoming so expensive? 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