EIA: Strong El Niño reduces winter heating demand

Propane demand decreased in the 2015-16 winter as a result of warm winter temperatures.

Propane demand decreased 16 percent in the 2015-16 winter compared to the 2014-15 winter, according to the Energy Information Administration (EIA).

EIA adds that heating oil and residential electricity demand also decreased by 45 and 6 percent, respectively, this winter compared with last winter. Above-normal temperatures during the 2015-16 winter were the main factor in lowering heating demand and winter fuel expenses. The 2015-16 winter season, which goes from October through March, was 15 percent warmer than last winter, driven in part by one of the strongest El Niño events in decades.

El Niño is a large-scale warming event that affects temperature and precipitation patterns in the Pacific Ocean. It occurs every three to five years as a result of warmer-than-normal ocean temperatures in the east-central equatorial Pacific. An El Niño typically lasts nine to 12 months. EIA reports the 2015-16 El Niño was one of the strongest on record, and it contributed to the warm winter weather experienced in the United States.

Warm winter temperatures reduced the overall number of U.S. heating degree-days. At the national level, the number of heating degree-days was 18 percent lower than the previous winter season and 12 percent lower than the National Oceanic and Atmospheric Administration’s forecast in September 2015.

In addition to record-high winter temperatures reducing the demand for space heating, abundant natural gas supplies and low crude oil prices helped to lower heating fuel prices. Throughout the 2015-16 winter, residential propane prices remained relatively flat, averaging $1.98 per gallon. On average, EIA says U.S. households paid 15 percent less for propane this winter. As of April 1, U.S. propane stocks were up by 2.0 million barrels to 64.9 million barrels, which is 6.9 million barrels higher than one year ago at the same time.