October 8, 2019 / 1:00 PM / 6 days ago

U.S. heating costs seen lower this winter than last year: EIA

(Reuters) - U.S. consumers will likely spend less to heat their homes this winter than last year due in part to forecasts for slightly warmer than normal temperatures, the U.S. Energy Information Administration (EIA) said on Tuesday.

EIA said in its Winter Fuels Outlook it expected households that primarily used electricity or natural gas as their heating source to spend slightly less from October to March this year than last year, while households using heating oil would spend 4% less and households using propane would spend 16% less.

In the South, however, EIA projected households using natural gas for heating will see a 4% increase in winter heating costs due to higher regional prices for the fuel.

During the winter of 2018-2019, the average U.S. household spent an estimated $581 using natural gas, $1,520 using heating oil and $1,174 using electricity. In the Midwest, the average household using propane spent $1,338.

EIA will release its outlook, which will contain estimated household expenditures for the winter of 2019-2020 at noon EDT (1600 GMT) on Tuesday.

Natural gas is the most common space heating fuel in 29 states and the District of Columbia. Electricity tends to be more common in southern states and heating oil is most prevalent in much of New England, EIA said.

Propane is more common in the Midwest, but it is not the primary heating fuel in any state.

EIA said its forecast of winter heating expenditures are based on weather, fuel price and consumption forecasts. One factor affecting prices is how much fuel there is in inventory.

EIA said natural gas storage has seen a significant rebound over the past year. Inventories in the Lower 48 states began the injection season on April 1 almost 30% lower than the previous five-year average.

By the end of October, the end of the injection season, EIA said gas inventories will likely be 2% higher than the previous five-year average.

EIA said it does not expect significant supply disruptions or price fluctuations in heating oil even though inventories in the Northeast were 26% lower than the previous five-year average at the end of September.

EIA noted heating oil can be transported to the Northeast by pipeline, vessels from other U.S. ports and imports. In addition, EIA said refiners are likely to maximize production of distillates in coming months.

Reporting by Scott DiSavino; Editing by Kevin Liffey and Nick Zieminski

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