Households that heat with oil are looking at the sharpest winter increase of any major fuel. The Energy Information Administration expects the average U.S. heating-oil household to spend $2,115 this winter, a 21% rise from last winter, because the fuel’s winter-average price is forecast at $5.26 per gallon, up 34%. Only about 3% of U.S. households burn oil, and most of them are in the Northeast.
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The federal statistics agency published the projections on Oct. 6 in its Winter Fuels Outlook for 2026-27.
The $5.26 gallon behind the 21% jump
In the October Winter Fuels Outlook, EIA’s base case has the average heating-oil household spending $2,115 across the winter, up 21%, on a price of $5.26 per gallon, up 34%. Consumption is expected to fall 9% to 402 gallons, so the bill rises only because each gallon costs so much more. The monthly path peaks in January at $509, after $360 in November and $465 in December, and eases to $420 in February and $361 in March.
EIA ties the price increase to the global distillate market. The outlook points to falling worldwide distillate production from reduced refining, low U.S. distillate stocks and higher export demand. EIA’s Sept. 18 explainer on diesel prices fills in the detail: tighter refining in Russia, China and the Middle East, U.S. distillate inventories of 15.8 million barrels in the week ending Sept. 11, which was 13% below the five-year seasonal average, and a retail diesel average of $6.29 per gallon in mid-September, the highest nominal reading since the series began in 1994.
The weekly numbers already sit above the forecast path. EIA’s Heating Oil and Propane Update put the U.S. average residential price at $6.138 per gallon on Oct. 12, up $0.088 from the prior week and $2.595 from a year earlier. Distillate stocks stood at 102.6 million barrels on Oct. 9, down 14.4 million barrels from a year ago, while the November price in the outlook is $5.79. A delivery bought now at the weekly average would therefore cost more per gallon than the forecast assumes for any month this winter, a gap that will narrow only if the refining and inventory pressures EIA describes ease on the schedule its base case assumes.
Who burns heating oil and who does not
Heating oil is a niche fuel by household count. EIA estimates 4,134 thousand U.S. homes will use it as their primary heating fuel in 2026, down 5% from 2025, against 60,962 thousand for natural gas and 57,880 thousand for electricity. The concentration in the Northeast is why a national average of $2,115 translates into a regional story: a small share of American homes is absorbing the largest percentage increase in the outlook, while the roughly half of the country that heats with natural gas or propane is expected to see lower bills. The gap between the two groups is about $1,475 a year at the national averages, before any home-specific differences.
The neighbors on the fuel ladder look different. Natural gas households are projected to spend an average of $640, down 9%, as the price falls to $13.44 per thousand cubic feet. Propane households are expected to spend $1,246, down 3%, and electric homes $1,196, up 4%. Those figures do not describe a clean menu of choices, and EIA says as much: the report cautions against assuming that switching fuels would lower a household’s own spending, since housing stock, equipment efficiency and weather exposure differ by fuel.
EIA’s separate look at why heating costs are hard to compare across fuels adds the structural reasons. The 2020 federal housing survey found propane, heating oil and wood more common in the coldest areas, and households that heat with a fuel tend to use it for water heating, cooking and drying clothes too.
Weather, El Niño and how fast prices reach the tank
The forecast assumes a winter that is not unusually harsh for oil users. Population-weighted heating degree days for the Northeast total 4,331 from November through March, 12% below last winter, while the national total of 3,155 is unchanged. That milder Northeast baseline is consistent with the 9% drop in oil consumption, and EIA runs side cases that move degree days up or down 10% in every region.
The weather call carries a stated caveat. EIA notes that NOAA has identified a “strong El Niño pattern this winter,” which could push temperatures away from the base case. A colder Northeast would raise gallons burned on top of an already elevated price, so the 21% rise in the base case is better read as a central estimate than a ceiling. A winter as warm as the base case would leave the average household burning about 402 gallons, while a 10% swing in degree days would move that figure in either direction.
Timing matters for heating oil more than for utility fuels. EIA assumes propane and heating oil prices pass through to customers in about four to six weeks, whereas retail natural gas and electricity lag wholesale markets because of state utility rate-setting rules. The outlook also assumes inflation of about 2% and that households pay the prevailing retail price when they fill up. EIA’s next Short-Term Energy Outlook, due Nov. 10, will show whether the $5.26 winter average holds.
This article was produced with the assistance of AI and reviewed by Morning Overview editors prior to publication.
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