EIA winter outlook splits household energy costs by fuel

What EIA forecast

The U.S. Energy Information Administration is forecasting a split winter for household energy costs. Its Oct. 7 Today in Energy analysis says lower natural gas and propane prices are expected to reduce average expenditures for households using those fuels, while higher electricity and heating-oil prices are expected to raise average expenditures for households using those fuels. Source: https://www.eia.gov/todayinenergy/detail.php?id=68264

EIA released the 2026–27 Winter Fuels Outlook with the October Short-Term Energy Outlook on Oct. 6, using forecasts completed Oct. 1. The Winter Fuels Outlook is here: https://www.eia.gov/outlooks/steo/report/perspectives/2026/10-winterfuels/article.php

The largest increase is in heating oil. EIA forecasts November-through-March average household expenditures of $2,115 for homes primarily heating with heating oil, up 21% from the previous winter. EIA says heating-oil homes are about 3% of U.S. homes and are mostly in the Northeast.

Electric heat is also forecast higher. EIA projects November-through-March average household expenditures of $1,196 for homes primarily heating with electricity, up 4%. In the West, EIA expects electricity-heating expenditures to rise 9% because of colder weather.

Natural gas and propane move the other way in the forecast. EIA projects November-through-March average household expenditures of $640 for homes primarily heating with natural gas, down 9%, and $1,246 for propane, down 3%. EIA says natural gas and propane households together account for about half of U.S. households.

Contractor-facing limits

For HVAC and electrical contractors, the EIA data can provide context for customer discussions, but it is not a forecast of bookings, service calls, replacements, financing demand, heat-pump adoption, dual-fuel installations or tuneup demand. The supplied EIA records do not quantify those contractor effects.

EIA warns that Winter Fuels Outlook comparisons are broad averages and should not be read as proof that switching to a fuel with lower average expenditures would lower a specific household’s bills.

For replacement, heat-pump, dual-fuel, tuneup and efficiency discussions, the EIA caveat points back to site-specific conditions. EIA says household energy use and expenditures depend on home size, energy efficiency, heating equipment, operating conditions, weather and the household’s primary heating fuel.

The supplied EIA records also do not quantify effects on contractor fleet or operating costs. Separately, EIA’s Oct. 6 press release says U.S. retail diesel prices are forecast to remain above $6 per gallon in October before gradually declining to about $4.50 per gallon in 2027. Source: https://www.eia.gov/pressroom/releases/press593.php

What could change

Weather is a significant source of uncertainty in EIA’s forecast. EIA says national winter temperatures are forecast to be about the same as last winter, with warmer conditions in the Northeast, much colder conditions in the West, and similar conditions in the Midwest and South. EIA also modeled side cases in which all regions are 10% colder or 10% warmer than the base forecast.

EIA says NOAA identified a strong El Niño pattern this winter that could cause large temperature variations from EIA’s forecast, affecting heating demand and expenditures.

Heating-oil and diesel markets remain exposed to distillate conditions in EIA’s outlook. EIA attributes higher heating-oil costs partly to tight distillate markets and expects U.S. distillate fuel inventories to be about 11% below the five-year average in the fourth quarter of 2026. EIA’s press release says East Coast distillate inventories were 32% below their five-year seasonal average in September and are forecast to remain 20% to 30% below average through the winter.

Retail price timing differs by fuel. EIA says heating-oil and propane retail prices generally reflect wholesale fuel-price changes within four to six weeks, while residential natural gas and electricity prices tend to lag wholesale changes because of utility-rate structures and regulation.