At a time when the cost of just about everything continues to rise, a U.S. Energy Information Administration press release brings good news regarding natural gas heating prices for the coming winter. In addition to the financial savings gained through the efficiency of natural gas, both residential and commercial consumers can expect to see an average drop of 21% in natural gas heating prices compared to last winter.
The extent of the savings compared to other fuel sources becomes even clearer when analyzing data from the full EIA 2023 Winter Fuels Outlook.
Forecast for Total U.S. Average Household Fuel Expenditures for November-March:
- Natural Gas: $605
- Electricity: $1,063
- Propane: $1,337
- Heating Oil: $1,856
Along with projections for a warmer winter in the western part of the country, a core driver of lower natural gas prices over the coming months is higher-than-normal natural gas inventories for the time of year. Generally, residential and commercial gas consumers in the United States use more fuel over the winter months than is produced, but with the EIA expecting natural gas inventories to be 6% higher than the five-year average at the end of October, this winter should see greater supply, pushing commodity prices down.
The reason for heating fuel stocks being above the five-year average is that the 2022-2023 winter season ended with relatively mild temperatures.
Even if the number of heating degree days this winter exceeds estimates, lower natural gas prices will still result in lower overall costs across the board.
“Natural gas prices this year have been consistently lower than in 2022,” noted said EIA Administrator Joe DeCarolis, “Even if this winter is colder than forecast, we still expect households heated by natural gas to pay less for heat this winter.”
Additional savings for non-heating expenditures
Natural gas remains the preferred heating source for American homes, with 46% of all households in the country consuming natural gas as their primary heating fuel. Typically, homes that heat with natural gas tend to also consume natural gas for non-heating expenditures such as water heating, cooking and clothes drying. This means that lower natural gas heating prices will also translate to lower expenses for other natural gas applications over the same time frame.
American homeowners and businesses aren’t the only parties primed to benefit from lower natural gas prices. The EIA expects a boost in natural gas-fired electricity generation through the rest of 2023 and for all of 2024.
- Natural gas to account for 42% of U.S. electricity generation in 2023
- EIA expects natural gas to maintain a 41% share of U.S. electricity generation for 2024
Both figures represent a greater share than 2022. In 2023 alone, 5 gigawatts of high-efficiency natural gas-fired generators came online.
Oil prices expected to rise in 2024
With forecasts predicting global petroleum inventories to decrease by approximately 280,000 barrels per day over the second half of 2023, the EIA expects higher oil prices to persist in 2024. Higher oil prices could lead to an increase in natural gas consumption to take advantage of the financial savings.
Lower natural gas heating prices good for everyone
With American households and businesses paying 21% less for heating this winter, more funds will be freed up for holiday shopping and end-of-year business initiatives. And energy savings is just one reason why natural gas is good for the economy.
Whether you use natural gas to heat your home or your business, we hope you enjoy a toasty warm (and affordable) winter!
Explore more ways to save with natural gas using the Blue Flame Alliance’s Energy Tools.