The drop in heating oil prices this past winter gave homeowners around New Jersey a lot to be happy about. Even though the winter of 2015 was one of the coldest in New Jersey in years, heating costs will lower thanks to the big drop in prices.
What does the future hold?
According to the International Energy Agency (IEA), low oil prices are here to stay for the short-term and medium-term. In fact, the IEA’s medium-term forecast says that we will not see higher prices like we saw last year for at least another five years, if not longer. This is great news for New Jerseyans who heat their homes and businesses with heating oil.
What’s keeping prices lower?
There are a number of reasons why the IEA expects oil prices to stay low. Two of the most important reasons are right out of a high school textbook:
- Increased output from the United States has led to significant stockpiles of oil. This is expected to continue, and increases in oil supply will help to keep prices low.
- Demand for oil in China will grow more slowly than it has in the past. Reduced demand helps to keep prices low.
While nobody can predict with absolute certainty where prices for heating oil, natural gas or any other fuel are headed, there are many indicators that tell us we can expect low oil prices to continue through 2015 and beyond.
To read more about the IEA short-term and medium-term outlook, click here.