While the blow up in the housing market may have brought the economy to the precipice of a depression, it did give us at least one good thing: Cheap energy prices.
A Wall Street Journal story (sub.) pegs the drop in natural gas and heating oil prices partly on the fact that there are a bunch of vacant forclosed homes as well as fewer businesses in operation. With fewer people occupying fewer homes, there is less need for heat, even during these cold days. The drop in demand means a drop in price:
Hesitant demand for heat has helped pummel the prices of fuels this winter. March heating-oil futures settled Tuesday at $1.3014 a gallon on the New York Mercantile Exchange, down 68% from record highs last summer. March Nymex natural-gas futures closed at $4.543 per million British thermal units, after hitting a 2½-year low of $4.280 on Feb. 2.
…Reports from natural-gas companies vary, but in Cleveland, where temperatures have been 25% lower than normal, peak natural-gas use has been 5% to 10% below similarly bitter winters, said a spokesman for local gas utility Dominion East Ohio, a unit of Dominion Resources Inc.
The conservation trend appears to be occurring in the heating-oil market. The nation’s largest heating-oil retailer, Stamford, Conn.-based Star Gas Partners LP, last week reported that it sold 3.1% fewer gallons in the quarter ended Dec. 31, despite the colder temperatures.
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