Natural gas and crude oil prices could stabilize, but no prediction is for certain
EMMET COUNTY, Mich., (WPBN/WGTU) – We have all felt the impact of higher gas prices this summer and some are sounding the alarm about propane and natural gas prices this winter.
“So, it’s really, you know, you fill you lose, you don’t fill, you lose kind of situation. And as a result, I find myself in a position where I can't really advise on whether people really need to get out there or not,” said Warren Wilczewski, a senior technical advisor.
The U.S. Energy Information Administration publishes short-term energy outlooks every month.
At this point, we’re partway between July and August’s reports, so while predictions have changed, there is still an expectation that costs will go down this year.
“Our projections are that natural gas prices are going to stabilize at levels below where they are right now, and the same goes for crude oil,” Wilczewski said. “But again, it's July. What happens by October, November, December? No telling.”
And that's for a few reasons, one of the biggest is the war in Ukraine.
The European Union announced last month that they would no longer import oil from Russia.
Meaning nations across Europe are going to have to look somewhere else to get products like oil and petroleum.
RELATED: EU leaders tackle inflation, energy shocks from Russia's war
“Suddenly, you have this supply shock or demand shock I mean it's going to be a little bit of both,” Wilczewski said. “Prices are going to rise, that’s inevitable. Now, it's all relative. Prices of propane to a large extent are dictated by what happens in other product markets.”
This uncertainty was a recurring theme in any discussion about what we can expect looking ahead.
Broadly, the EIA's July report forecasts lower average costs in things like gasoline and crude oil by the end of the year.
And while they expect electricity use to increase, experts say the cost is far less volatile.
“Whether it's gasoline or diesel or propane, those prices are going to be more volatile than the price of electricity, because electricity is kind of an omnivore,” Wilczewski said. “You know, natural gas, coal, nuclear, renewable. There is a plethora of fuels available to the electrical generators that dispatch at the lowest cost.”
The EIA reports renewable energy will account for around 22% of energy this year and groups like CMS Energy see renewable costs dropping.
“In terms of the actual costs of the renewables, it should be relatively stable, and over time it’s been coming down right. So, the cost of putting solar panels in is down quite a bit over the past 20, 10, however many years you want to look at,” said Brian Hartmann, president of CMS Enterprises.
So, while there is no guarantee buying propane now and locking in a price will save you money, at least you know what you’re paying.
And with the volatility worldwide, that may actually be worth something.
