EIA's Winter Fuels Outlook, released on October 11, 2017, forecasts that households that heat primarily with natural gas will spend $69 (12%) more this winter compared with last winter, largely due to a 9% increase in forecast consumption and a 2% increase in price. The forecast average expenditures of households heating with natural gas are comparable to the previous five-winter average.
EIA forecasts that residential natural gas consumption will average 62 thousand cubic feet (Mcf) per household from October 2017 through March 2018. The increase in consumption compared to last winter is based on a 13% increase in heating degree days, and the forecast return to normal winter temperatures. Winter natural gas prices to residential customers will average $10.36/Mcf, according to the Winter Fuels Outlook. On a per Mcf basis, residential and the Henry Hub price are forecast to increase this winter about the same amount, 18 cents and 16 cents, respectively, from last winter.
Natural gas consumption peaks during the winter season, with nearly half of U.S. homes using natural gas as their primary heating fuel. Compared to last winter, EIA forecasts higher natural gas use and supply. EIA expects increased consumption in all sectors – residential/commercial (higher by 2.9 billion cubic feet per day (Bcf/d)), net exports of both liquefied natural gas and pipeline (2.0 Bcf/d), electric power (1.5 Bcf/d), and industrial (0.8 Bcf/d). This increase in consumption will be offset by 5.8 Bcf/d in production and 1.0 Bcf/d in withdrawals from storage.
EIA projects natural gas inventories will reach 3.8 trillion cubic feet (Tcf) at the end of October, based on expected injection rates. The rate of inventory builds since the start of injection season in April was lower than the five-year average. However, cooler-than-average temperatures in August reduced the use of natural gas for electricity generation and builds for the end of summer were above the five-year average.
EIA's Winter Fuels Outlook, which includes scenarios where temperatures are 10% above and below current forecast levels, is a supplement to EIA's Short-Term Energy Outlook (STEO).
