Winter Fuels Outlook 2024–25

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What is the Winter Fuels Outlook?

The Winter Fuels Outlook provides EIA’s expectations for U.S. residential energy consumption, prices, and expenditures for the upcoming winter as well as analysis of market conditions for the four most common U.S. residential space heating fuels: natural gas, electricity, propane, and heating oil.

The average household expenditures discussed in this supplement are best interpreted as a broad guide to compare recent winters for an average home with a set heating fuel in a specific location. Differences in the housing populations complicate direct comparisons across fuels, and readers should not assume that switching to another fuel with lower energy expenditures—as presented in this report—would necessarily result in lower expenditures for their household.

We forecast average residential consumption, price, and household expenditures for the United States and, depending on the fuel, for up to four U.S. Census Bureau regions: the Northeast, Midwest, South, and West. Because these forecasts are sensitive to weather conditions, we provide two side cases that vary weather assumptions from those in our base case.

We will update these forecasts throughout the winter concurrently with our Short-Term Energy Outlook releases. We will also provide visualizations that track forecast adjustments through the winter. In April, we will publish a Today in Energy article summarizing how actual winter outcomes compared with our forecasts.

What's new?

This version of the Winter Fuels Outlook consistently distinguishes space heating from other residential end uses within the consumption and expenditure forecasts. This version is also the first to incorporate forecasts for retail propane prices, which were introduced in the September 2024 Short-Term Energy Outlook.

The data values and analysis below were published with the October 2024 edition of the Short-Term Energy Outlook on October 8, 2024.

Forecast summary

We expect that most U.S. households will spend about the same or less on energy than they did last winter, depending on a household’s main space heating fuel and the region where they live. Generally, retail energy prices in our forecast are less than they were last winter, but temperatures across much of the country are set to be colder this year, meaning homes will use more energy for space heating. The combination of lower prices and colder weather results in relatively little change in expenditures.

The exception is the Midwest, where last winter was very mild. In that region, we expect a return to more normal temperatures that will outweigh the effect of lower energy prices and cause spending on heating fuels to rise by between 2% and 11%, depending on the energy source, in the coming winter.

Alternative weather assumptions produce a wider forecasted range of propane and heating oil expenditures compared with natural gas and electricity. In our base case, we expect spending by propane-heated homes will be similar to last winter. In our case with colder weather assumptions, those propane expenditures could be notably higher than last winter. Expenditures for households using heating oil are down by 5% from last year in our forecast unless actual winter temperatures are colder than expected.

Fuel inventories are an important source of winter supply. More natural gas and propane are currently stored in U.S. inventories compared with their previous five-year (2019–2023) average going into this winter. These relatively high inventories have helped keep prices for those fuels below year-ago levels. However, distillate fuel inventories, a category which includes heating oil, are slightly below their five-year average.

Weather assumptions

We assume this winter will be colder than the last winter across much of the country, especially in the Midwest. Our assumption is that temperatures this winter will be closer to average following a very mild winter last year.

Weather can affect household heating expenses in two ways. First, cold weather raises the amount of energy required to keep a house at a specific temperature. Second, because cold weather raises aggregate demand and can disrupt supply, it can cause energy prices to rise. These price increases can be more severe if fuel inventories are relatively low. In the cases we consider, we adjust for both effects.

In the Winter Fuels Outlook, we use data from the National Oceanic and Atmospheric Administration (NOAA) for the current month (October) weather assumptions and the previous 30-year trend for the remaining months of the forecast. We measure winter weather effects using heating degree days (HDDs), which are an aggregate measure of how daily average temperatures deviate from a base temperature of 65°F.

For example, an average daily temperature of 50°F results in 15 HDDs (65 minus 50 equals 15). A 30-day month of those 50°F days would result in 450 HDDs for the month (15 times 30 equals 450). Heating degree days are population-weighted so that areas with larger populations are given more weight than less-populous areas when averaging within a geographic region.

In our outlook, we expect 13% more HDDs in the Midwest this winter, 5% more in the Northeast, and 2% more in the South. The exception is the West, where we assume temperatures will be the same on average as last winter.

Because weather is a significant source of uncertainty in these forecasts, the Winter Fuels Outlook includes two side cases where, measured in HDDs, all regions are either 10% colder or 10% warmer than the base forecast. Nine of the previous ten winters have fallen within that 10% warmer or 10% colder range, relative to the forecasts we publish at this time of year (early October).

Because our forecast uses a 30-year trend in HDDs for any months beyond the current month, it does not factor in the potential for annual climate variations like El Niño or La Niña. NOAA’s Climate Prediction Center expects that La Niña conditions will emerge soon and persist through January to March 2025. Although the effects of each La Niña event are different, NOAA notes that “the southern tier of U.S. states—from California to the Carolinas—tends to be warmer and drier than average.”

	Nov	Dec	Jan	Feb	Mar	Total	% change
Northeast	634	918	1,071	914	795	4,333	+5%
Midwest	736	1,077	1,227	1,011	817	4,869	+13%
South	302	488	555	419	303	2,066	+2%
West	468	672	654	546	481	2,822	+0%
United States	486	724	803	653	533	3,199	+5%

Effects of wholesale prices on retail prices

Wholesale market conditions affect fuels differently. For natural gas, changes in retail prices lag changes in wholesale prices largely due to the nature of utility regulation. Over longer periods, changes in natural gas wholesale and retail prices are closely correlated. Some state utility commissions set the rates utilities can charge for natural gas deliveries a year or more in advance of billing to reflect the cost of wholesale natural gas that utilities purchased over many months.

The timing and frequency of rate changes can vary by utility. In times of high price volatility, some utilities may adjust retail rates several times in a year. In addition, residential natural gas prices include charges to cover utility operating costs and the cost to transport and distribute natural gas, which are not directly linked to wholesale commodity natural gas prices.

The prices residential consumers pay for electricity lag changes in wholesale spot prices in a way that is similar to natural gas. Electricity prices charged to ultimate customers reflect the costs of supplying the electricity and delivering it to households. Increases in costs may pass through to customers more quickly in areas of the country with markets where consumers have a choice of electricity providers.

Wholesale price changes for heating oil and propane are passed to consumers quickly because rates in those markets are not regulated as they are for natural gas and electricity. We generally estimate that changes in wholesale fuel prices become fully reflected in retail prices over a period of four to six weeks.

Many heating oil and propane users buy supplies ahead of the winter and refill as needed. When forecasting expenditures, our calculations do not account for fuel that consumers purchase ahead of its use or fuel that was contracted at prices set before the start of the winter. We assume households pay the prevailing retail price for heating oil and propane at the time they use it.

Natural gas

In our base case, slightly more natural gas consumed due to colder weather and slightly lower natural gas prices this winter mean we expect U.S. average natural gas bills this winter will be similar to last winter. We expect lower residential natural gas prices in all scenarios compared with last year as U.S. Henry Hub spot prices have remained low in 2024 after declining in 2023. Changes in expenditures vary by region: we expect homes in the West will spend 6% less on their natural gas bills this winter, while homes in the Midwest will spend 11% more.

We expect the 45% of U.S. homes that primarily heat with natural gas to consume 48 thousand cubic feet (Mcf) from November through March, 5% more than last winter. Even with increased consumption, the U.S. average price for natural gas for residential consumers in our forecast is 4% less than last winter, resulting in negligible change in winter bills for natural gas in our base case, with forecast expenditures of about $600 per household.

In the colder scenario, we expect a 14% (6 Mcf) increase in consumption and a 7% increase in expenditures compared with last winter. The warmer weather scenario has slightly less natural gas consumption compared with last winter and a 2% decrease in expenditures compared with last winter.

Natural gas-heated homes in the West have the largest forecast decrease in spending this winter because we expect natural gas prices will fall the most from last winter in that region. In the base case, we forecast 6% lower residential natural gas prices in the West than last winter, driven by reduced wholesale prices in the West that have remained below 2023 for most of 2024. We expect consumption of natural gas in the West to be the same in our base case compared with last winter, so the entire forecast decrease in natural gas bills in this region is driven by lower prices.

The Midwest is the only region where we expect a noticeable increase in natural gas bills this winter in our base case. Winter household natural gas bills in the Midwest are forecast to average $590 in our base case, or 11% more than last winter. The increase is driven by our expectation for colder weather in the Midwest, compared with the record-setting mild winter last year that reduced natural gas consumption, most notably in Midwest states. Midwest residential consumers primarily heating with natural gas used an estimated 54 Mcf of natural gas last winter, and we expect them to consume 60 Mcf this winter.

U.S. natural gas inventories have generally been more than the previous five-year average for most of the past two years, but more recently inventories are approaching near-normal levels. More natural gas has been consumed in the United States this year, especially in the electric power sector. At the same time, we’ve seen less U.S. dry natural gas production because of voluntary production curtailments made by several companies because of low natural gas prices.

Propane

In our base case, we expect households heating primarily with propane will pay about the same amount as they did last winter on average across the United States. Propane is used as a heating fuel in 5% of U.S. households, mostly in rural areas.

In our base case, we expect that homes in the Midwest will see propane expenditures increase by 2% from last winter, the greatest increase among the regions. The increase in spending by Midwest homes is driven by an 11% increase in consumption because of a return to more normal temperatures this winter after the very mild winter last year in the Midwest.

The increase in consumption is partly offset by our expectation of 8% lower retail propane prices in the Midwest this winter. In the Northeast and the South, we expect households to spend about the same as last winter, as forecast increases in consumption are offset by lower prices.

In the colder scenario, we forecast a 19% increase in household expenditures for propane this winter in the Midwest, a 13% increase in the Northeast, and a 7% increase in the South. In the warmer case, we forecast homes in all regions would spend about 8% less than the previous winter.

Because propane can be produced from both crude oil and natural gas, propane prices typically follow the prices of crude oil and natural gas but can vary significantly depending on supply and demand conditions, particularly in response to winter weather. We expect the retail propane spot price will average $2.40 per gallon (gal) throughout the winter, 5% less than the previous winter.

The Midwest often has lower retail prices than other regions, averaging $1.89/gal this winter. The Midwest has a network of propane distribution hubs throughout the region, making access to retail supply robust compared with other regions. Midwest propane inventories accounted for 26% U.S. propane inventories in 2023.

We forecast U.S. propane production to increase by about 3% this winter compared with last winter. We expect U.S. propane consumption across all sectors to be up about 11% this winter compared to last winter because of increased propane use for space heating and for petrochemical production. In October and November in the United States, propane is consumed in commercial grain dryers when the corn harvest takes place, and we expect minimal grain drying demand for propane at the start of this winter.

Propane inventories are seasonal. Inventories typically build from April to September, when propane consumption is relatively low, and fall during the winter. At the end of September, U.S. propane inventories totaled 100 million barrels, 9 million barrels above the previous five-year average. We forecast that U.S. propane inventories will remain well above their previous five-year average throughout the winter.

In the Midwest (PADD 2), where most of the U.S. households that heat with propane and most of the demand for grain drying are located, inventories were 29 million barrels as of the end of September, which is 3 million barrels more than the five-year average.

Heating oil

Heating oil, a variation of distillate fuel oil or diesel, is the primary space heating fuel for 4% of U.S. households. We expect these homes will spend about 5% less on heating oil this winter than last. More than 80% of the homes that use heating oil as their main heating fuel are in the Northeast.

Even though we publish heating oil consumption as a U.S. average, the lack of significant consumption outside of the Northeast means the U.S. average heating oil price is heavily weighted toward the Northeast and corresponds closely to the Northeast regional average price.

We estimate that U.S. households that use heating oil for space heating will consume an average of about 400 gallons of heating oil this winter, or 4% more than last winter, but we expect heating oil prices will be lower this winter, averaging $3.50/gal, down 9% from last winter. At this price, homes that primarily heat with heating oil will spend an average of $1,410 this winter.

In our warmer case, we expect the average household using heating oil as their primary heating fuel will consume 2% less heating oil than last winter and prices will be 10% less than last winter, reducing expenditures 12% from last winter. Conversely, in our colder case, we estimate per household consumption would be 13% more than last winter, prices 7% lower, and expenditures 5% higher.

Lower heating oil prices reflect lower crude oil prices and significantly lower refinery margins for diesel and heating oil, which have fallen considerably going into this winter. Crack spreads broadly indicate refiners’ margins and are calculated by subtracting the price of crude oil from the wholesale price of a petroleum product. For consumers, lower refining margins translates to lower prices for petroleum products. Diesel and heating oil are both types of distillate fuel oil; U.S. distillate consumption has generally been lower so far this year.

Less domestic consumption, less global diesel consumption, and more penetration of renewable diesel into the U.S. diesel market are narrowing differences in the prices of crude oil and wholesale heating oil. High regional inventories particularly on the East Coast are also contributing to lower heating oil crack spreads. The wholesale price of heating oil used in STEO, the New York Harbor Heating Oil price, suggests the heating oil crack spread against Brent was negative in September, and we expect that will continue into October.

Despite being the largest heating oil demand region in the United States, only 5% of the United States’ refining capacity is located in the East Coast, and most of it is concentrated in New Jersey and Pennsylvania. Additional supply of distillate in the Northeast generally comes by pipeline from elsewhere in the United States, especially from the U.S. Gulf Coast. In particular, the Colonial Pipeline system extends from the Gulf Coast to as far as New York Harbor. Imports from eastern Canada are also a crucial source of Northeast regional supplies, which enter the region through maritime imports into Boston and other coastal ports.

Inventories of distillate fuel oil on the East Coast remain below the five-year average but are higher than they were this time last October. Although we expect refinery runs to decrease in line with seasonal trends, we don’t expect significant refinery maintenance that would delay production this winter.

Electricity

U.S. households that primarily use electricity for heating can expect to spend 2% more on their electricity bills this winter, largely because of slightly increased expected electricity consumption. Although we don’t expect much change in the average U.S. residential price of electricity this winter, increases may occur in some regions, while other regions may have slightly lower prices.

Winter residential electricity expenditures increase the most in the Midwest region (up 6%), which had particularly mild weather last winter. We attribute this increase in electricity expenditures for Midwest households to a colder weather forecast in the region.

By comparison, in the South, which has the largest share of households heating with electricity, forecast winter weather is similar to last winter, so we expect relatively little change in expenditures for those homes in the South.

Sharp increases for residential electricity prices occurred in many areas of the country in 2022 and 2023 in line with broader inflation trends. Electricity prices increased particularly in New England and California as a result of constrained natural gas supply and rising costs associated with delivering electricity to end-use customers.

Although retail electricity prices in some states in the Northeast have fallen in 2024, they are still relatively high compared with last winter. We expect the residential electricity price this winter in the Northeast will average 22 cents per kilowatthour (3% more than last winter).

Forecast winter expenditures for homes heating with electricity in the Northeast are the highest among regions in our forecast: nearly $1,400, or a 5% increase from last winter. We forecast residential electricity prices in the West to be 2% higher than last winter, with similar increases in overall electricity expenditures.

Energy expenditures

The consumption and expenditure forecasts in the Winter Fuels Outlook pertain to a home’s main space heating fuel. For most households, the main space heating fuel is also used for other purposes. Almost all households primarily heating with natural gas equipment, for example, will also use natural gas for water heating, cooking, or clothes drying.

Consumers are interested in both how the total expenditure for their primary heating fuel changes, since their bills reflect total consumption, and the estimated expenditure on the heating portion of their bill, which produces the biggest differences in expenditures from one winter to the next based on the prevailing temperature.

Beginning with this year’s Winter Fuels Outlook, we are showing forecasts for space heating and other end uses, as well as total consumption and expenditures amounts. The difference between total expenditures and the space heating portion is most noticeable for electricity.

How we derive estimates of heating consumption and expenditures

Unlike cooling, which is almost entirely provided by electric air-conditioning equipment in the United States, space heating can be provided by many sources and even by multiple fuels within a home. Many households use secondary equipment such as fireplaces and portable heaters. In situations where the fuel for secondary heating equipment is the same fuel used for main space heating, our estimates include both main and secondary heating. When the secondary fuel is different from the main fuel, our estimates only include consumption and expenditures for the main heating fuel.

We estimate household consumption and expenditures for space heating and other end uses portions based on information from our Residential Energy Consumption Survey (RECS). To develop our forecasts, we make several assumptions to convert annual RECS consumption data to monthly values, and we use monthly retail price forecasts available in our Short-Term Energy Outlook (STEO).

The figure below shows total estimated annual expenditures in U.S. homes by primary heating fuel based on information in the 2020 edition of our Residential Energy Consumption Survey. In this report, we focus on the colored portions—space heating and other end uses associated with the main space heating fuel—to estimate expenditures for this winter heating season.

For space heating, we used historical RECS information about the space heating consumption and weather for each fuel-region combination to estimate space heating consumption based on temperature. We assume heating consumption varies in proportion to heating degree days, so these consumption-per-degree-day values are allocated to the 2024–25 winter according to the number of forecasted heating degree days in each month.

In addition to varying by geographic region, energy consumption also varies by households’ main heating fuel type. For example, in the South, households heating with electricity experience milder winter weather than those heating with natural gas.

The remaining portion of consumption—the part not associated with space heating—reflects all other consumption associated with a household’s main space heating fuel in the winter months. For example, a household using natural gas as its main space heating fuel may also use natural gas for water heating, cooking, and clothes drying. For all fuels except electricity, these estimates are based on annual values converted to per-day rates and allocated to the 2024–25 winter according to the number of days in each month.

For electricity, we subtracted air conditioning from the annual total—essentially assuming that all air conditioning occurs in April through October—and allocated the remaining consumption using the same approach described for non-electric fuels.

To form expenditure estimates, we multiplied these monthly consumption values by the residential-sector retail price forecasts available in STEO.

Effects of inflation

The prices and expenditures presented in this report are in nominal (not inflation-adjusted) terms. We assume inflation will average about 2% this winter based on forecasts for the Consumer Price Index from the S&P Global macroeconomic model we use in STEO. Broadly, an average basket of consumer goods will cost 2% more compared with last winter. Given that rate of inflation, increases in prices and expenditures would need to be about 2% higher than the values reported to indicate increases beyond general inflation.

Household characteristics

The estimates discussed here are broad measures for comparing recent winters. Energy consumption and expenditures depend on the size and energy efficiency of individual homes, their heating equipment and operating conditions, and weather. A key determinant of expenditures is the primary heating fuel, each of which has a unique geographic distribution across the United States.

Natural gas is the main space heating fuel in 45% of U.S. homes, making it the most widely used residential heating fuel in the country. Electricity is also widely used for heating, especially in the South: more than one in four U.S. homes is an electric-heated home in the South. The share of U.S. homes that use electricity as their main space heating fuel has increased to 43% from 39% just five years ago.

Propane and heating oil are the primary space heating fuels in a much smaller share of homes nationally but are used widely in regions that tend to have some of the coldest winters. Heating with propane is more common in the upper Midwest and Northeast. Heating oil is used for residential heating mostly in the Northeast.

Comparisons across fuels

Readers should not assume that switching to another fuel with lower energy expenditures—as presented in this report—would necessarily result in lower expenditures for their household.

Differences in the housing populations across fuels complicate direct comparisons. For example, within the Northeast, the homes heating with electricity tend to be smaller than those heating with other fuels. Electric-heated homes in the Northeast are also more likely to be apartments and have fewer occupants than those heating with other fuels.

Relative values of energy efficiency—the insulation and air tightness of the home as well as the type of heating equipment and its operating efficiency—further complicate comparisons across fuels. Electric heating equipment in particular has a wide range of performance. Electric resistance equipment such as furnaces, baseboard heaters, and portable heaters simply convert electricity into heat with a thermal efficiency of 100%.

By comparison, heat pumps, either central heat pumps or ductless mini-splits, move heat from the outside to the inside during the winter. Their performance is measured by the coefficient of performance (COP), which indicates the amount of heat moved per unit of electricity consumed to move it. COPs for air source heat pumps are typically in the 2 to 4 range, making them significantly more efficient than electric resistance heating systems.

However, the consumption and expenditures associated with these technologies depend to a large extent on household characteristics and the climate in which they are located. For example, an electric resistance heater used in a small, well-insulated home in the South could result in lower expenditures than an air source heat pump placed in a larger, drafty home in the Northeast.

Making comparisons at the heating equipment level requires us to control for the variables that affect those expenditures. We are exploring ways to derive technology-level estimates for future editions of the Winter Fuels Outlook.

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Links to EIA's winter-related resources

EIA maintains several data series and products that can inform energy markets throughout winter.

For natural gas, we publish daily spot and futures prices and monthly residential natural gas prices by state. Our Weekly Natural Gas Storage Report captures changes in natural gas inventories, and these metrics are visualized in our Natural Gas Storage Dashboard. Our Natural Gas Weekly Update tracks price and consumption trends throughout the winter.

For propane and heating oil, our Heating Oil and Propane Update page provides wholesale and retail prices for several states. These prices are published weekly from October through March. Our Weekly Petroleum Status Report provides weekly inventory, production, and demand data series that are visualized on the Heating Oil and Propane Update page.

Specifically for propane, we provide a weekly briefing on propane inventory levels that offers more granular detail than the information in our Weekly Petroleum Status Report. This information will be updated weekly starting in November.

For electricity, our Hourly Electric Grid Monitor provides hourly information on electric demand and net electricity demand by source throughout the Lower 48 states. Our Electric Power Monthly compiles information on state-level retail electricity prices and demand. These series are also presented in our Electricity Data Browser.

We also publish a daily New England Dashboard that displays electricity, natural gas, and petroleum market metrics for the New England region.