Winter forecast—higher fuel oil costs but lower propane expenditures

monthly U.S. forecast of residential winter heating fuel expenditures

It wasn’t too many years ago when propane prices in Oklahoma and the Midwest were sky high during the winter, but this winter, Oklahomans who use propane for home heating will find a welcome scenario.

A winter forecast from the U.S. Energy Information Administration predicts customers who use propane for home heating will see lower costs in the coming months. Natural gas prices dropped even more on Monday.

December natural gas fell 13 cents to $3.35 per 1,000 cubic feet.

The weekend cold snap that resulted in freezing weather no doubt had some Oklahoma homeowners heading to the thermostats to crank up the heat.

On the other hand, those who heat primarily with heating oil will spend more this winter compared to last winter. It’s the forecast in the EIA’s 2023 Winter Fuels Outlook (WFO).

“We expect increased heating oil consumption this winter because we expect this winter will be colder than last winter, driving up heating oil expenditures,” declared the EIA.

“We expect lower prices for U.S. propane this winter, which is why we forecast slightly lower propane expenditures.”

Indiana winter storm propane supplies

The 5% of U.S. households heating with propane will spend $1,343, down 3% from last winter, according to the EIA forecast. But the 4% of American homes that heat primarily with heating oil will spend an average of $1,851, resulting in 8% more than last winter.

The forecast propane expenditures vary significantly by region of the country. The EIA expects households that heat with propane in the Northeast will spend about the same as last winter, households in the Midwest will spend 11% less, and households in the South will spend 6% more.

The EIA forecast that households using heating oil are primarily in the Northeast and will likely consume 40 more gallons of heating oil per household this winter than last winter, all because of anticipated colder weather. While heating oil prices will average $4.20 a gallon this winter compared to $4.31 a gallon last winter, more heating oil will be used due to the lower temperatures.

The EIA’s forecast is based on weather assumptions on data from the Nastional Oceanic and Atmospheric Administration and the previous 30-year trend. It also says winter will run from November through March.