Gas and propane heat should cost less this winter, while electric and oil heat cost more, EIA says

The U.S. Energy Information Administration expects the average household that heats with natural gas to spend 9 percent less this winter than last, or about $640 from November through March, while homes heated with propane should spend 3 percent less, about $1,246. Households that heat with electricity are forecast to spend 4 percent more, about $1,196, and those burning heating oil 21 percent more, about $2,115.

The agency published the projections on Oct. 6 in its 2026-27 Winter Fuels Outlook, and summarized them in an Oct. 7 Today in Energy article titled “Mixed outlook for energy expenditures this winter.” Weather is not the driver nationally; prices are.

Natural Gas and Propane Households Spend Less

Natural gas and propane together heat about half of U.S. homes, and EIA’s Today in Energy article says lower prices for both fuels are what pull spending down. In the Winter Fuels Outlook tables, the average natural gas price is $13.44 per thousand cubic feet, 9 percent lower than last winter, and spending falls 14 percent in the Northeast, 10 percent in the Midwest and 15 percent in the South.

The West is the exception to the gas savings, and the reason is temperature rather than price. Spending there is projected to rise 7 percent, to $590 per household, because EIA expects temperatures much colder than last winter, which was unusually warm. Heating degree days in the West are forecast to climb 25 percent, while the Northeast is expected to see 12 percent fewer than last winter.

Propane follows the same logic with a sharper regional split. EIA puts the average propane price at $2.52 per gallon, down 2 percent, and household spending down 15 percent in the Northeast to $1,687, down 4 percent in the Midwest to $1,305 and flat in the South at $1,164. A cushion on the gas side comes from storage; the agency’s Oct. 6 press release says natural gas inventories are expected to enter winter 2 percent above the five-year average, and that, in the agency’s words, they “provide a cushion for heating demand.” The STEO carries the same logic into next year, with the Henry Hub spot price forecast at $3.16 per million Btu in 2027, 9 percent below 2026, as production increases offset rising LNG exports and keep inventories above average.

Heating Oil Takes the Largest Jump

Heating oil is the outlier by a wide margin. EIA forecasts the fuel to average $5.26 per gallon this winter, 34 percent more than last winter, and spending of $2,115 per household, up 21 percent, even though consumption is projected to fall 9 percent to 402 gallons because the Northeast, where most oil-heated homes are, should be milder.

About 3 percent of U.S. households heat with oil, mostly in the Northeast. The price increase traces to global distillate markets: EIA says reduced refining has cut global distillate production and raised international prices, and U.S. distillate exports rose 20 percent in the first seven months of 2026 compared with the same period in 2025, mostly to Europe. East Coast distillate inventories were 32 percent below the five-year seasonal average in September, and the agency expects them to stay 20 to 30 percent below average through the winter, according to the Oct. 6 release. The October Short-Term Energy Outlook adds that retail diesel averaged $6.29 per gallon in September.

Weekly retail data already show the gap. Heating season pricing began this month, and EIA’s heating oil and propane page lists residential heating oil at $6.042 per gallon for the week of Oct. 5, up $2.487 from a year earlier.

Electricity: Higher Rates, Slightly Higher Use

Electric heat accounts for more than 40 percent of homes. EIA projects the average residential electricity price during the heating season at 18.23 cents per kilowatthour, up 3 percent, with consumption up 1 percent to 6,562 kilowatthours per electrically heated home, which together produce the 4 percent rise to $1,196.

Regional results diverge. Spending is forecast to fall 3 percent in the Northeast, where prices rise 4 percent but use drops 6 percent, and to rise 3 percent in the Midwest and South and 9 percent in the West, where colder weather lifts consumption by 9 percent. On the wholesale side, the STEO has prices averaging about $52 per megawatthour in 2026, 11 percent above 2025, with PJM up 41 percent.

One caveat applies to propane buyers: the same EIA weekly series puts residential propane at $2.598 per gallon for the week of Oct. 5, 18 cents above a year ago, so the winter-average decline depends on prices easing from today’s level.

This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.

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