Natural-gas heated households are expected to face a comparatively smaller hike in their bills this winter heating season than households heated by heating oil and propane, according to the Energy Information Administration (EIA).

In its Short-Term Energy Outlook for November, which was released last Tuesday, the EIA raised its projections for heating fuel expenditures to be paid by households fueled by heating oil and propane. Heating oil expenses for typical Northeast households are now expected to average about 37% above last winter’s level, up from the agency’s previous projection of a 28% hike. Propane-heated households can now expect increased heating expenditures of about 26% this winter, up from the EIA’s prior forecast of 22%. But the expected hike in expenditures for gas-heated households this winter will remain unchanged from the 15% projected last month, the agency said.

Regardless of bulging natural gas inventories, the Department of Energy (DOE) agency raised its projection for the average Henry Hub spot prices for 2004 — this time by eight cents to $6.18/Mcf. “Spot prices have risen significantly now that the heating season is under way,” the EIA said.

“Natural gas prices increased in September and October in response to natural gas production losses in the Gulf of Mexico caused by Hurricane Ivan. The average spot price for natural gas at the Henry Hub for…September was $5.15/Mcf and $6.54/Mcf in October. Henry Hub prices are expected to average $6.18/Mcf in 2004 and $6.33/Mcf in 2005,” the EIA noted.

Meanwhile, working gas in storage is estimated to have reached its highest level since 1991 at 3,305 Bcf, a 6% hike over a year ago and 9% higher than the five-year average.

The agency anticipates a slight hike in gas demand in 2005, growing to 22.47 Tcf from 22.02 Tcf this year. It expects domestic production to rise by 1.6% next year. “A portion of that expected growth comes from assuming no hurricane-related disruptions in 2005 to match the production losses from Hurricane Ivan in 2004,” it said.

“Steady, if modest, increases in liquefied natural gas imports, restrained export growth, and carryover from the robust storage levels…are expected to contribute to moderate improvement in the supply picture through 2005.”

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