Oil and Rising Temps Make For Cheaper Winter Heating Bill

You’d never know it was December if not for the holiday decorations. Temperatures in New York City are hovering above 60 degrees and may near 70 on Christmas Eve according to weather.com.

The trend may continue across the continental U.S. with temperatures expected to track above-normal for December, January and February, according to the National Oceanic and Atmospheric Administration (NOAA) in part due to this year's El Nino, which is expected to be one of the strongest on record.

Rising temperatures, combined with falling oil and gas prices, point to lower home heating bills this winter season. The U.S. Energy Information Administration's (EIA) short-term energy outlook is forecasting lower costs for most energy sources.

However, the EIA's Jonathan Cogan reminds FOXBusiness.com that the winter heating season runs from October through March and in his opinion, "We still have a long way to go."

Still, consumers are likely to catch a break based on early estimates from EIA.

1. Lower Home Heating Bills Ahead for 2016

Rising temperatures, combined with falling oil and gas prices, point to lower home heating bills this winter season.

2. Heating Oil Costs 31% Cheaper

Even before the price of WTI crude oil breached the $35 level in mid-December the U.S. Energy Administration (EIA) was forecasting a discounted 2015/2016 winter heating season. Expenditures are expected to dip nearly 31% while consumption is seen falling over 12%. For example, if your winter home heating bill is typically $150 per month, the discount would lower the bill to $105. The $45 per month savings would amount to $270 over the course of the winter season (Oct-March).

3. Propane Fuel Costs 25% Cheaper

Above average temperatures, especially in the Northeast, are keeping a lid on propane prices. Similar to natural gas, inventories are plenty, about 27% higher than last December. This is a sharp contrast to last winter when areas, such as New England, saw record snowfalls. The EIA predicts the cost of propane this winter will fall 18% in the Northeast and 25% in the Midwest.

4. Natural Gas Costs 13% Cheaper

Natural Gas prices are hovering near a 14-year low and inventories are sitting at a record 4,009 billion cubic feet. With no catalyst on the horizon to dent ample supplies consumers who heat their homes with natural gas may enjoy a 13% cut in their winter fuel bill, according to the EIA.

Plunging prices have slammed the closely followed United States Natural Gas ETF (NYSE:UNG) which tends to trade in tandem with natural gas prices.