Residential heating oil and propane prices entered the winter heating season higher than last winter’s prices, and EIA’s Short-Term Energy Outlook (STEO) forecasts those prices will remain higher through March. As a result of higher crude oil prices, colder expected winter temperatures, and lower fuel inventories than last winter, EIA forecasts that U.S. average heating oil and propane prices will be 12% higher and 10% higher, respectively.
Prices for U.S. petroleum products such as heating oil and propane tend to follow changes in Brent crude oil spot prices, the most widely used global benchmark price for crude oil. Brent crude oil prices are forecast to average $56 per barrel (b) this winter, up from $51/b last winter.
Although inventories of heating oil and propane are lower this year than last year, they are still within the range of values experienced in the previous five years at this time. As of November 24, distillate fuel oil inventories in the Northeast (Petroleum Administration for Defense Districts 1A and 1B), where the vast majority of heating oil is consumed, totaled 37.7 million barrels, 31% lower than at the same time last year. Total U.S. propane inventory levels were 73.2 million barrels as of November 24, 27% lower than at the same time last year.
EIA’s State Heating Oil and Propane Program (SHOPP), a joint effort between EIA and state energy offices, collects state-level residential heating oil and propane price data in many states where residential use of heating oil and propane is common. SHOPP started in 1978 and has expanded over the years in response to greater need for timely price data during periods of supply disruption to heating oil and propane markets.
SHOPP data are used by state and federal governments, the media, policy makers, consumers, and analysts to monitor markets as well as to facilitate emergency response to supply shortages of these heating fuels during the winter months. SHOPP collects residential heating oil and propane data in 21 states. In 17 additional states, SHOPP collects propane prices but not heating oil prices, and, in the District of Columbia, heating oil but not propane prices.
SHOPP also includes wholesale propane prices in some states. Last year, EIA added wholesale propane price data provided by the Oil Price Information Service for 10 additional states.