Average expenditures of US household for natural gas, heating oil, electricity, and propane are projected to decrease this winter heating season (Oct. 1-Mar. 31) compared with last winter, which was 11% colder than the previous 10-year average nationally, according to the US Energy Information Administration’s latest Winter Fuels Outlook.
Also, the National Oceanic and Atmospheric Administration (NOAA) forecasts US heating degree days this winter season to be 12% lower than last winter.
“US households in all regions of the country can expect to pay lower heating bills this winter, because temperatures are forecast to be warmer than last winter and that means less demand for heat,” said EIA administrator Adam Sieminski.
According to the outlook, average US households may expect a 5% decrease in winter gas expenditures as temperatures are returning to near-normal levels. US gas inventories have recovered from last winter season’s big drawdown and are expected to exceed 3.5 tcf at the start of this year’s heating season, mainly thanks to rising US gas production and a mild summer.
Notably, the savings from lower winter gas consumption are partially offset by higher residential gas prices. Although EIA forecasts lower Henry Hub prices this winter, current spot prices do not directly translate into lower delivered residential prices, which in contrast will be 6% higher than last winter due to residential gas utilities’ activities.
Meanwhile, EIA forecasts average US household heating expenditures this winter to be 15% lower for heating oil, 27% lower for propane, and 2% lower for electricity, respectively, from last winter. Although forecast expenditures are lower than last winter, electricity and heating oil expenditures are still higher than the previous 5-winter average.
Residential heating oil prices are expected to be 6% lower this winter because crude oil prices are lower. Residential propane prices will be 17% lower, reflecting higher inventories this year.