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January 8, 2010 / Dave Gorham

Temperatures Down; Fuel Up: Supply and Demand

Colder weather has been driving up fuel prices. Even if consumers keep their thermostats at the recommended 68F, homes, offices, hospitals, etc. have to work harder to maintain those same temperatures. “Working harder” equates to more fuel being used. More fuel being used not just in the somewhat-cooler-than-comfortable buildings and residences but in the supply lines providing the fuel (local and interstate trucks, along with their waterway counterparts).

Gasoline and heating oil prices have been on the rise since November.  In December, New York City was 9.2% colder than normal, Chicago was 10.2% colder, and Dallas was 22.8% colder than normal. The consulting firm Prenova has been telling its client retailers to budget an additional 3-4% for energy this year as compared to last year.

Even as temperatures begin to moderate by spring the forecasts of a rebounding economy will put Americans back in their cars and SUVs continuing the increase in demand for fuel. Experts are predicting $3.00 per gallon for regular gasoline before the spring. In November it was estimated gasoline prices would reach $2.65-2.75 per gallon the first week of January.

ImpactWeather 30-day Outlook updated 1/1/10.

ImpactWeather 90-day Outlook issued 11/13/09

ImpactWeather’s next 90-Day Temperature Outlook issuance will be: Feb 15.

 

 

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