Economy, weather, and CO₂

U.S. macroeconomics
To generate the macroeconomic assumptions in the Short-Term Energy Outlook (STEO), we input STEO energy price forecasts into S&P Global’s macroeconomic model and produce a conditional forecast.

Emissions
We forecast U.S. energy-related carbon dioxide (CO₂) emissions to decrease by 2.2% this year compared with 2025 and remain mostly unchanged in 2027. Emissions reductions in 2026 result from slight decreases in coal, natural gas, and petroleum products consumption. Decreases in coal emissions are primarily associated with decreases in coal-fired electricity generation. Lower natural gas emissions are a result of lower natural gas consumption in the residential and commercial sectors for space heating, as well as less natural gas use in industrial production. Slight reductions in petroleum emissions are associated with lower consumption of motor gasoline.

CO₂ emissions in 2027 remain mostly unchanged from 2026 levels as minor increases in natural gas and petroleum product consumption are partially offset by a continued decline in coal use.

Weather
The United States experienced a cold December, averaging about 750 heating degree days (HDDs), 6% more than the 10-year December average. However, based on our current forecasts and data from the National Oceanic and Atmospheric Administration, we assume milder weather through the rest of the 2025–2026 winter heating season ending in March. We forecast that the United States will average around 1,950 HDDs in the first quarter of 2026, 3% fewer HDDs than the 10-year average. Overall, we expect this winter will have 2% fewer HDDs this winter compared with last winter.