While oil prices have crept up after reaching a 13-year low in early 2016, the U.S. Department of Energy is still forecasting that crude oil will remain in the $50- to $60-per-barrel range this year, barring any unforeseen events (especially in the volatile Middle East).
Because heating oil, like gasoline and diesel fuel, is a “finished” product derived from crude oil, its price and crude oil’s are closely tied. Right now, the strong dollar and slow growth in global demand are helping keep costs down.
But the primary driver for these manageable prices is the giant increase in U.S. production. Our country is producing so much oil that we could become a net exporter of oil, rather than a net importer, within the next 10 years. That’s good news for the future of oil prices.
Meanwhile, the Department of Energy recently projected that natural gas prices will rise 48% over the next two years — keep that in mind if you’ve been thinking of switching to natural gas. (Read more about the real cost of converting to natural gas on page 4.)
The bottom line: The predictions that oil would be more expensive than natural gas are proving as yesterday as VHS tapes!