EIA Short-Term and Winter Fuels Outlook

Transcription

1 EIA Short-Term and Winter Fuels Outlook New York Energy Forum October 18, 21 New York, NY Richard Newell, Administrator U.S. Energy Information Administration Richard Newell, New York Energy Forum, October 21 1

2 Overview EIA expects average heating bills to be 3% higher this winter than last an increase of $24 to a U.S. average of $986 per household Due to higher fuel prices forecast this winter compared to last 2% higher electricity prices 8% higher heating oil prices 6% higher residential natural gas prices 11% higher propane prices Bill increases are moderated by a warmer winter weather forecast for the South, but little change in the Midwest/West; slightly colder in the Northeast Inventories of fuel oil and natural gas are currently well above typical levels, which helps dampen price increases if winter is colder than expected in contrast, propane stocks are low in the New England region Richard Newell, New York Energy Forum, October 21 2

3 U.S. households forecast to spend an average of 3% ($24) more on heating bills this winter (October 1 March 31) Percent change in fuel bills from last winter (forecast) Fuel bill Base case forecast If 1% warmer than forecast If 1% colder than forecast Heating oil Natural gas Propane Electricity Average of all fuels Richard Newell, New York Energy Forum, October 21 3

4 Winter heating season forecast is 3% warmer than last winter, and 1% warmer than 3-year average U.S. population-weighted heating degree-days 1, NOAA winter 7.4% warmer than last year Oct Nov Dec Jan Feb Mar Source: NOAA (September 15, 21) (NOAA forecast) Richard Newell, New York Energy Forum, October 21 4

5 Higher natural gas heating bills for some regions this winter Households using natural gas as primary heating fuel West South Midwest Northeast U.S. 33% 53% 52% 63% 72% Percent change from last winter (forecast) Consumption Average price Total expenditures Richard Newell, New York Energy Forum, October 21 5

6 EIA expects residential natural gas prices to be 6% higher this winter than last Dollars per thousand cubic feet (mcf) 25 Winter Forecast 2 Residential price Henry Hub spot price Richard Newell, New York Energy Forum, October 21 6

7 Future natural gas prices remain uncertain Dollars per million Btu Henry Hub spot price STEO Henry Hub price forecast NYMEX Henry Hub futures prices 68% NYMEX confidence interval 95% NYMEX confidence interval Forecast Richard Newell, New York Energy Forum, October 21 7

8 Less than 1% chance of natural gas price being higher than $5.5 per MMBtu for January 211 contract month probability of exceedence 4% 35% 3% 2% 17% 1% 7% % > $4.5 / MMBtu > $5. / MMBtu > $5.5 / MMBtu Source: EIA STEO Oct 13, 21 and CME Group Richard Newell, New York Energy Forum, October 21 8

9 Natural gas inventories are close to last year s record-high levels Billion cubic feet Forecast 4,5 4, 3,5 3, 2,5 2, 1,5 1, 5 1% warmer 1% colder Base case Normal range Richard Newell, New York Energy Forum, October 21 9

10 Winter electricity bill forecast shows little change from last winter Households using electricity as primary heating fuel West South Midwest Northeast U.S. 18% 13% 32% 37% 61% Percent change from last winter (forecast) Consumption Average price Total expenditures Richard Newell, New York Energy Forum, October 21 1

11 Winter heating oil bills are likely to be higher in most regions Households using heating oil as primary heating fuel West South Midwest Northeast U.S. 1% 2% 2% 7% 3% Percent change from last winter (forecast) Consumption Average price Total expenditures Richard Newell, New York Energy Forum, October 21 11

12 Crude oil price forecasts are very uncertain Dollars per barrel WTI spot price STEO WTI price forecast NYMEX light sweet crude oil futures prices 68% NYMEX confidence interval 95% NYMEX confidence interval Forecast Richard Newell, New York Energy Forum, October 21 12

13 U.S. heating oil retail price forecast to average 23 cents per gallon higher than last winter Dollars per gallon Dollars per barrel 5. Winter Forecast Heating oil price WTI crude oil spot price Richard Newell, New York Energy Forum, October 21 13

14 Uncertainty over future heating oil prices is driven primarily by crude oil prices Dollars per gallon Heating oil average U.S. wholesale price STEO heating oil wholesale price forecast NYMEX N.Y. harbor heating oil futures prices 68% NYMEX confidence interval 95% NYMEX confidence interval Forecast Richard Newell, New York Energy Forum, October 21 14

15 Less than 1% chance of wholesale heating oil price being higher than $2.75 per gallon for January 211 contract month probability of exceedence 4% 3% 27% 2% 1% % 1% 3% > $2.5 / gallon > $2.75 / gallon > $3. / gallon Source: EIA STEO Oct 13, 21; and CME Group Richard Newell, New York Energy Forum, October 21 15

16 Going into winter, distillate inventories are well above the upper end of the normal range Million barrels % warmer Forecast 1% colder Base case Normal range Richard Newell, New York Energy Forum, October 21 16

17 Higher expected propane fuel bills in most regions Households using propane as primary heating fuel West South Midwest Northeast U.S. 4% 4% 8% 4% 5% Percent change from last winter (forecast) Consumption Average price Total expenditures Richard Newell, New York Energy Forum, October 21 17

18 EIA forecasts residential propane prices will average $2.42 per gallon, 24 per gallon higher than last winter Dollars per gallon 3. Forecast Winter Richard Newell, New York Energy Forum, October 21 18

19 Propane inventories are near the middle of the normal range Million barrels 8 7 Forecast 1% warmer Normal range % colder Base case Richard Newell, New York Energy Forum, October 21 19

20 For more information U.S. Energy Information Administration home page Short-Term Energy Outlook Annual Energy Outlook International Energy Outlook Monthly Energy Review Phone: (22) Live expert from 9: AM 5: p.m. EST Monday Friday (excluding Federal holidays) Richard Newell, New York Energy Forum, October 21 2

21 Supplemental Richard Newell, New York Energy Forum, October 21 21

22 The changing balance between global consumption and non-opec supply growth can drive oil prices change from prior year million barrels per day change from prior year dollars per barrel Forecast Non-OPEC supply growth (left axis) World consumption growth (left axis) WTI crude oil price (right axis) Richard Newell, New York Energy Forum, October 21 22

23 When spare capacity is tight, it can drive prices and volatility higher price of light, sweet crude oil dollars per barrel 14 OPEC surplus capacity 12 WTI crude oil price spare capacity million barrels per day Forecast Richard Newell, New York Energy Forum, October 21 23