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Oil Prices Jump 4% in One Day — How Will the Increased Costs Affect Your Home Heating and Gas Prices?

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A spike in oil prices on Jan. 11 left Americans once again wondering how deep they will have to dig into their wallets to pay for gasoline and home heating, even though the price hike came less than two months after signs pointed to an easing of fuel costs moving into 2022.

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The short answer is: Expect prices at the pump to go up, but home heating prices to go down.

Crude oil closed at $81.22 a barrel on Jan. 11, a gain of nearly 4% for the day, CNN reported. That was its highest level since Nov. 11, 2021. Prices continued to push higher early on Jan. 12. Gasoline prices ticked up to $3.30 a gallon vs. $3.29 the previous week, according to AAA.

Prices at the pump are projected to rise again this year, according to the latest government estimates. But natural gas home heating prices should ease after rising for much of 2021.

The U.S. Energy Information Administration’s most recent Short-Term Energy Outlook report, released Jan. 11, noted that U.S. regular gasoline retail prices averaged $3.02 per gallon in 2021, up from an average of $2.18 per gallon in 2020. The agency forecasts that gasoline prices will rise to an average of $3.06 per gallon in 2022 before settling back to $2.81 per gallon in 2023.

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Natural gas spot prices at the Henry Hub — a natural gas pipeline system in Louisiana — averaged $3.91 per million British thermal units (MMBtu) in 2021. The EIA expects Henry Hub spot prices will average $3.82/MMBtu in the first quarter of 2022, and then fall to an average $3.79/MMBtu for all of 2022 and $3.63/MMBtu in 2023.

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Meanwhile, concerns about the supply of gas in the United States have eased in recent weeks.

“We’ve still got January, February, March — but it’s certainly a good sign that its coming down,” Mark Wolfe, executive director of the National Energy Assistance Directors’ Association, told The New York Times. “If it’s a warmer winter, then our estimates about consumption will be down, and if consumption is down, that’ll reduce the price of the fuel. It’s a good sign.”

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