Weather forecasts for the winter predict warmer temperatures in regions east of the Rocky Mountains compared with last year. Based on those predictions and higher inventory levels, the U.S. Energy Information Administration (EIA) expects propane and heating oil prices to be lower for the season.
In contrast, during the winter of 2013-14 persistent cold temperatures in much of the country increased demand for these and other heating fuels, depleting inventories. The economic consequences of those conditions on consumers were evident in national-level prices for residential propane and No. 2 heating oil, which set record highs in February 2014.
Unlike retail natural gas and electricity, which are both distributed through utility companies, retail heating oil and propane are sold by independent dealers. These dealers and their customers can face considerable supply and price uncertainty, particularly in the event of inclement weather or supply disruptions.
The EIA’s State Heating Oil and Propane Program (SHOPP) collects state-level esidential heating oil and propane price data in 38 states during the winter heating season. SHOPP is a joint effort between EIA and state energy offices in regions (especially states in the Northeast and Midwest) where heating oil and propane are commonly used as heating fuels.
In all of the states surveyed, propane and heating oil prices are lower than they were at this time last year, and EIA expects prices will remain at lower levels throughout the winter.
Principal contributors: Maureen Klein