By Nicole Jao
NEW YORK, Oct 6 (Reuters) – US homes that primarily heat with natural gas or propane — about half of households — will spend less on energy this winter than last, the Energy Information Administration said in its winter fuels outlook report on Tuesday.
Expenditures for homes heating mainly with natural gas are expected to be 9% lower on average this winter, while homes heating primarily with propane will see a 3% drop, the agency said.
The lower fuel cost this winter is partly due to well-stocked natural gas inventories in the US. The EIA expects natural gas inventories to enter the winter heating season 2% above the previous five-year average. Price increases should be limited due to robust production growth and relatively high inventories.
Meanwhile, the EIA expects households that use heating oil, about 3% of US homes mostly in the US Northeast, to pay about 21% more than last winter as inventories of the fuel dwindle.
The wars in Iran and Ukraine have severely disrupted diesel supplies, causing a global shortage that is unlikely to ease before next year.
The EIA is forecasting a 30% increase in heating oil prices, which would be offset by milder Northeast weather. It expects national winter temperatures to be about the same as last winter and the previous 10-winter average.
US East Coast distillate stockpiles were 32% below their five-year seasonal average in September and are forecast to remain between 20% and 30% below average through the winter, the EIA said.
“Relatively high natural gas inventories entering the winter season provide a cushion for heating demand, while households that rely on heating oil face higher prices because distillate markets remain tight,” EIA Administrator Tristan Abbey said in a note.
The agency expects national average consumption of natural gas by US homes this winter to remain flat from last year, while consumption is expected to fall by 9% for heating oil and by about 1% for propane.
(Reporting by Nicole Jao in New York; editing by David Gaffen and David Gregorio)
