Finally some good news on winter fuel costs

P Gasoline, heating fuel and electricty are all expected to cost considerably less this winer, thanks to less demand and plentiful supplies.

A prediction by the Energy Information Administration that heating-fuel costs will be much lower this winter is welcome news to Americans, who paid more to stay warm last winter than they ever had.

The administration's winter-fuels report said the cost of gasoline, heating fuel and electricity all should be lower because supplies are plentiful and demand is weak because of the slumping economy.

That's directly opposite from last year, when short supplies and heavy demand sent costs of energy to unprecedented levels.

The news is especially good to homeowners in the Midwest, where approximately 56 million homes are heated with natural gas.

The report said those who heat with natural gas can expect to spend about a third less this winter, an average savings of about $320 over last winter.

Homeowners using heating oil and propane are likely to see costs drop 17 to 23 percent, which means savings of at least $170 over the winter months.

Industrial demand for natural gas fell by 18 percent during the first half of the year and is expected to continue falling because of the declining economy, the report said.

Natural-gas prices on wholesale markets are expected to stay at about $2.10 a thousand cubic feet compared to an average of $6.20 with peaks of $10 last winter.

The collapse of the gas market is likely to push down heating oil and electricity prices as well.

The report also contained good news for motorists.

Gasoline prices, which have been falling over the past couple of months, are expected to continue to do so.

This largely reflects the drop in crude oil prices and expectations that the economy will continue to lessen demand through the winter.

Crude prices reached $31 a barrel earlier this year and have since fallen to below $23. Prices should be on average $7.60-a-barrel cheaper than last winter.

Last winter's high costs largely took consumers by surprise. Natural-gas users saw costs almost double, and many low-income families -- including almost 5 million households who received energy assistance last year -- are still trying to recover.

If the forecast holds true, and falling crude oil prices don't reverse themselves as a result of any of a number of factors -- including fallout from the nation's war on terrorism -- Americans can expect to save a little money this winter. And a mild winter would make it doubly nice.