- “Temperatures east of the Rocky Mountains have been significantly colder this winter (October – January) compared with the same period both last winter and the previous 10-year average, putting upward pressure on consumption and prices of fuels used for space heating. U.S. average heating degree days were 12% higher than last winter (indicating colder weather) and 8% above the previous 10-year average. The Northeast was 11% colder than last winter, the Midwest 17% colder, and the South 20% colder, while the West was 3% warmer.
- The cold weather has had the greatest effect on propane prices, particularly for consumers in the Midwest. Cold temperatures have tightened supplies in the East and Midwest regions that were already low heading into the winter heating season. Residential propane prices in the Midwest rose from an average of $2.08 per gallon (gal) on December 2, 2013, to $4.20/gal on January 27; prices fell back to $3.83/gal on February 3. EIA now expects that propane prices in the Midwest will average $2.41/gal over the winter (39% higher than last winter) while those in the Northeast will average $3.43/gal (14% higher than last winter).
- While the North Sea Brent crude oil monthly average spot price fell by almost $3 per barrel (bbl) from December to January, cold temperatures have tightened heating oil supplies and helped drive up retail prices. Weekly U.S. residential heating oil prices increased by $0.14/gal between the end of December and end of January. Despite the recent increases, EIA expects that U.S. heating oil prices will average $3.82/gal this winter, $0.05/gal (1%) lower than during last year’s winter heating season.
- Cold weather also contributed to a new record-high withdrawal of natural gas from storage and a surge in natural gas spot prices. Natural gas working inventories on January 31 totaled 1.92 trillion cubic feet (Tcf), 0.78 Tcf below the level at the same time a year ago and 0.56 Tcf below the previous five-year average (2009-13). Henry Hub natural gas spot prices increased from $4.32 per million British thermal units (MMBtu) on January 2 to $5.66/MMBtu on January 27, before falling back to $5.04/MMBtu on January 31. EIA expects that the Henry Hub natural gas spot price, which averaged $3.73/MMBtu in 2013, will average $4.17/MMBtu in 2014, an increase of $0.27/MMBtu from last month’s STEO. Residential natural gas prices are expected to average $10.16 per thousand cubic feet (Mcf) this winter, an increase of $0.41/Mcf (4%) from last winter.”
