Energy Department Expects Heating Oil Spending to Rise 21% This Winter
Key Facts
The U.S. Energy Information Administration expects spending by households that rely on heating oil to rise 21% in winter 2026–27 compared with the previous winter, as it forecasts the average oil price will increase 34%. The agency said warmer weather expected in the U.S. Northeast could partly ease the impact of higher prices on spending. The outlook varies by fuel type: it expects spending by households using natural gas to fall 9% and spending by propane users to decline 3% compared with the previous winter. This divergence leaves households that rely on heating oil facing an expected increase in costs, while spending by users of the other two fuels is forecast to fall. The estimates are part of the agency’s outlook for the 2026–27 heating season.
The Energy Information Administration said, "Relatively high natural gas inventories entering the winter season provide a cushion against heating demand, while households that rely on heating oil face higher prices because distillate markets remain tight." This partly explains the difference in spending forecasts among fuel types: ample natural gas inventories contrast with a tight distillate market. Heating oil includes distillates, whose markets are affected by production, trade and inventory levels. The agency expects U.S. distillate fuel inventories in the fourth quarter of 2026 to be about 11% below the five-year average. That means available inventories are entering the period below their usual average, alongside a forecast increase in heating oil prices.
The Energy Information Administration attributed higher international distillate prices to a decline in global production linked to reduced refining activity. In the United States, distillate exports rose 20% in the first seven months of 2026 compared with the same period a year earlier, with much of the increase going to Europe. The agency identified these fuel flows among the factors shaping the distillate market, alongside lower global production. The estimated 34% increase in heating oil prices refers to the average for the coming winter compared with the previous winter, while the projected 21% rise in spending reflects heating costs for households using the fuel. The agency expects warmer weather in the Northeast to partly limit the effect of the price increase on those households’ spending.
The Energy Information Administration’s forecast assumes that average winter temperatures across the United States will be close to those of the previous winter and the average of the previous ten years. The agency said, however, that a strong El Niño pattern could bring different weather conditions, affecting heating demand and household spending. Weather therefore remains a factor in the level of consumption behind the projected costs, alongside prices and the mix of fuels used in homes. In markets, front-month New York heating oil futures settled at $4.1309 per gallon on November 10, compared with a settlement of $4.4216 on November 2. These prices are futures settlements, while the Energy Information Administration’s forecasts concern household spending and fuel prices during the winter season.
The Energy Information Administration will release its weekly petroleum status report on Thursday, November 12, 2026, covering data for the week ended November 6. The agency set the release times at 12:00 p.m. and 2:00 p.m. Eastern time, following the federal government shutdown on Wednesday. On inflation, the Consumer Price Index for All Urban Consumers rose 0.4% on a seasonally adjusted basis in October, after increasing 0.6% in September, according to the Bureau of Labor Statistics. The unadjusted index was 337.511 in October, on a 1982–84=100 basis, up 0.2% for the month before seasonal adjustment. The bureau did not collect survey data for October 2025 because of a lapse in appropriations, and therefore did not publish year-over-year changes for some October 2026 indexes.
The Bureau of Labor Statistics is scheduled to release its November 2026 Consumer Price Index report on Thursday, December 10, at 8:30 a.m. Eastern time. The report will follow October data showing the seasonally adjusted monthly increase slowed to 0.4% from 0.6% in September. Meanwhile, heating spending estimates for the 2026–27 season remain based on the fuel price and weather forecasts announced by the Energy Information Administration. According to the agency, weather that differs from its baseline assumption could change household heating demand and spending. The December release is the next inflation data milestone cited in these estimates.