EIA expects US heating oil spending to rise 21% this winter as distillate stocks run low

The US Energy Information Administration said on 7 October 2026 that household heating costs this winter will diverge by fuel, with spending on heating oil and electricity expected to rise while spending on natural gas and propane falls. The figures come from its Short-Term Energy Outlook.

The forecast by fuel

The EIA expects homes that heat with heating oil, about 3% of US homes and mostly in the Northeast, to see the largest increase. It forecasts a 21% rise in spending on heating oil compared with last winter, with the heating oil price averaging 34% more. Warmer temperatures forecast for the Northeast are expected to offset part of the price increase.

More than 40% of US homes heat with electricity, and the EIA expects their bills to rise by 4% on average. Spending is forecast to fall by 9% on average in homes heating with natural gas and by 3% in those heating with propane, because of lower prices for those fuels. Together, natural gas and propane heat about half of US households.

The agency assumes national average temperatures similar to last winter, but warmer in the Northeast and much colder in the West, with the Midwest and South similar to last year.

Why distillates are tight

According to the EIA, global production of distillate fuel, which includes heating oil, has fallen because of reduced refining activity worldwide. That has pushed up international prices, raising the cost of US distillate imports and increasing demand for US exports. US distillate exports in the first seven months of 2026 were 20% higher than in the same period last year, with much of the extra volume going to Europe.

As a result, US distillate stocks are low heading into winter. The EIA expects inventories to be about 11% below the five-year average in the fourth quarter of 2026.

What it means for traders

For traders following energy markets, the outlook confirms a split between a tight distillate market and softer natural gas and propane prices in the EIA’s own forecasts. Weekly inventory data in the EIA’s Weekly Petroleum Status Report will show whether distillate stocks track the agency’s expectations. For background, see what moves oil prices.