EIA’s Short-Term Energy Outlook predicts propane pricing trends through March

The U.S. Energy Information Administration’s (EIA) Short-Term Energy Outlook (STEO) forecasts heating oil and propane prices will remain higher than last winter through March.

U.S. heating oil and propane prices for residential customers. Click to enlarge. Courtesy of EIA.

As a result of higher crude oil prices, colder expected winter temperatures and lower fuel inventories than last winter, EIA forecasts that U.S. average propane prices will be 10 percent higher.

Prices for U.S. petroleum products, such as heating oil and propane, tend to follow changes in Brent crude oil spot prices, the most widely used global benchmark price for crude oil. According to EIA, Brent crude oil prices are forecast to average $56 per barrel this winter, up from $51 per barrel last winter.

According to EIA, propane inventories are lower this year than last year, but are still within the range of values experienced in the previous five years at this time.

Weekly heating oil and propane inventories Jan. – Nov. 2018. Click to enlarge. Courtesy of EIA.

Total U.S. propane inventory levels were 73.2 million barrels as of Nov. 24 – 27 percent lower than at the same time last year, reports the EIA.

EIA’s State Heating Oil and Propane Program (SHOPP), a joint effort between EIA and state energy offices, collects state-level residential heating oil and propane price data in many states where residential use of heating oil and propane is common. SHOPP started in 1978 and has expanded over the years in response to greater need for timely price data during periods of supply disruption to heating oil and propane markets.

According to EIA, SHOPP data are used by state and federal governments, policy makers, consumers and analysts to monitor markets as well as to facilitate emergency response to supply shortages. SHOPP collects residential heating oil and propane data in 21 states. In 17 additional states, SHOPP collects propane prices, but not heating oil prices, and, in the District of Columbia, heating oil but not propane prices.