Bloomberg News

Cooler U.S. Weather May Boost Heat Demand in East, Midwest

October 13, 2011

(Updates with heating oil prices and Energy Department projections for winter heating costs beginning in fourth paragraph.)

Oct. 13 (Bloomberg) -- Cool weather in the next two weeks may be enough to make residents of the U.S. East and Midwest turn up their thermostats, said Matt Rogers, president of Commodity Weather Group LLC.

In his 6- to 10-day and 11- to 15-day outlooks, Rogers predicts temperatures will be lower than average in the Midwest from Oct. 18 to Oct. 22 and in the Northeast from Oct. 23 to Oct. 27.

“The intensity of the cooling is not severe, but it is more than sufficient to boost year-on-year heating demand increases for the second half of October in the Midwest and East,” Rogers said today in a note to clients.

Heating oil for November delivery increased 3.67 cents, or 1.3 percent, to settle at $2.9714 a gallon on the New York Mercantile Exchange. That marked the fuel’s first four-day rally since Aug. 31.

Traders use long-range temperature predictions to gauge energy use and market fluctuations. Hot or cold weather can increase demand for heating and cooling, and power plants use about 30 percent of the nation’s gas supplies, according to Energy Department data.

Households in the U.S. that use heating oil will see their bills rise to the highest ever this winter as prices jump almost 10 percent, the Energy Department said in its annual Winter Fuels Outlook yesterday.

The cost to heat a home with oil will rise 8.4 percent to $2,493 from $2,300 a year earlier, higher than any previous winter, the department said. The fuel will average $3.71 a gallon, up from $3.38 in 2010.

Rogers, based in Bethesda, Maryland, predicts the Southwest and Southern California will be warmer than normal from Oct. 18 to Oct. 27.

--Editors: Charlotte Porter, Bill Banker

To contact the reporters on this story: Brian K. Sullivan in Boston at Barbara J Powell in Dallas at

To contact the editor responsible for this story: Dan Stets at

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