As summer ends and temperatures cool down, individuals and businesses are beginning to plan their heating strategies for the upcoming winter. The rise in fuel prices in the last few months have given many people cause for concern, but recent reports indicate that prices could go down before it gets to be too cold outside. However, despite last year's mild conditions, predictions of an exceptionally cold winter could negate any cost savings.
The national average heating fuel costs increased by 32 cents in the last two months, but the U.S. Energy Information Administration expects that trend to reverse direction before the end of the year. According to administration officials, prices are expected to be 4 percent lower this year than they were in 2011.
Last year, relatively high heating costs were alleviated by a relatively warm winter. According to the National Oceanic and Atmospheric Administration, we won't be so lucky this year. The organization is forecasting an 18 percent drop in average temperatures this winter. Michael Barden, senior planner with the Energy Office, said he believes that even with reduced prices, individuals will spend more money on heating costs this year than last year.
"That colder winter would more than negate any price drop in heating fuel," Barden said.
Usage could also increase because of the lower prices. If families see that they are paying less per gallon than they have in previous winters, they may find themselves more willing to turn their thermostats up an extra degree or two, especially on particularly cold nights.
Regardless of the reason, oil demand should be increasingly high this winter and oilfield producers will be under a tremendous amount of pressure to produce quickly and efficiently. This can be achieved with the use of a hydraulic pump or an artificial lift. Companies looking to improve their extraction procedures should contact an oilfield technology consultant to determine which solutions best fit their needs.