According to the U.S. Energy Information Administration (EIA) website article published on April 10, 2023, the EIA estimated that U.S. households consumed less heating oil this winter heating season because of warmer-than-expected temperatures than the EIA estimated at the beginning of the winter heating season. Combined with stable heating oil prices, our current estimate of average household heating costs for this winter is lower compared with our forecast in the Winter Fuels Outlook (WFO), a supplement to the October 2022 Short-Term Energy Outlook (STEO). Since October, our estimates of heating oil consumption fell by 9% and prices by 2%.
STEO publishes WFO tables during the winter heating season (October 1–March 30). In final WFO update, the EIAestimated that the average U.S. household that uses heating oil as its primary space heating fuel consumed 470 gallons of heating oil this winter, down 9% from the October estimate of 519 gallons. Warmer-than-normal winter temperatures reduced consumption, particularly in the Northeast. Overall, 4% of U.S. households use heating oil as the primary space heating fuel, mostly located in the Northeast.
In the March WFO, the EIA estimated that consumer prices averaged $4.45 per gallon, slightly ($0.09) lower than the EIA forecast in October. The EIA expects U.S. household expenditures for heating oil to average $2,094 for the 2022–23 winter heating season, down more than 11% from the initial October estimate of $2,354. Although heating oil costs are lower than the EIA had previously expected, the cost was 13% higher compared with the 2021–22 winter heating season.
At the beginning of the winter, the EIA expected that Russia’s full-scale invasion of Ukraine and subsequent sanctions would limit Europe’s supply of heating oil, and record-high natural gas prices would lead to fuel switching from natural gas to distillate fuel (which includes heating oil and diesel fuel), contributing to higher heating oil prices. Warmer-than-normal winter temperatures in Europe reduced distillate demand below our initial estimates, and imports into Europe from the Middle East and Asia helped offset the loss of imported distillate from Russia and increased inventories. Warmer temperatures and the resulting decrease in demand over the past several months have increased distillate inventories in both Europe and the Northeast United States.
