Average household expenditures for all space-heating fuels are projected to be $1,137 this winter (October 1 to March 31), a 15-percent increase over the estimated $986 spent last winter.  The largest increases will be in households using heating oil and natural gas.  The projected increases primarily reflect higher prices, although colder weather than last winter will also contribute to higher fuel use in many areas.

Strong global demand and low surplus production capacity contributed to the run-up to record crude oil prices in July.  The current slowdown in economic growth is contributing to the recent decline in oil demand and the sharp decline in prices since July.  Nonetheless, oil markets are expected to remain relatively tight because of sluggish production growth.  Absent a major worldwide economic downturn that significantly impacts global demand, West Texas Intermediate (WTI) crude oil prices are projected to average about $112 per barrel in both 2008 and 2009.