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.
But households that use heating oil, about 3% of US homes mostly in the US Northeast, are expected to pay about 21% more than last winter, the EIA said.
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.
“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 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.
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.
(Reporting by Nicole Jao in New York; editing by David Gaffen)