EIA’s estimates for residential energy expenditures this winter (November 2025 through March 2026) have increased since the publication of its initial Winter Fuels Outlook forecasts in mid-October: “We now expect a colder winter, and our retail energy price forecasts have risen, especially for natural gas and propane.
“Each October, we publish a Winter Fuels Outlook with forecasts for energy consumption, prices, and expenditures for U.S. households. We categorize homes based on their main heating fuel: natural gas, electricity, propane, or heating oil. Almost all U.S. homes use one of these four fuels as their main heating source.
“In each month from November through March, we update these forecasts based on actual weather and prices and the most recent Short-Term Energy Outlook (STEO) forecasts for future weather and prices. As the winter progresses, we update our Winter Fuels Outlook forecasts concurrently with each STEO release through April 2026.
“Weather is a key source of uncertainty in our forecasts, so we provide three forecasts with different weather assumptions. Retail energy prices—especially for propane and heating oil—are sensitive to weather-related effects on energy demand, supply, and wholesale prices.
“Our weather assumptions are partially based on the National Oceanic and Atmospheric Administration’s (NOAA) forecast for the current month. NOAA now expects that this December will be about 8% colder than the average of the previous 10 Decembers. In our October Winter Fuels Outlook forecast, we expected this winter would be slightly warmer than last winter; we now expect generally similar weather to last winter.
“Retail natural gas and propane prices for the residential sector have also surpassed our initial forecasts. For natural gas, our retail price forecast has increased concurrently with a change in wholesale natural gas prices. When we formed our October STEO forecast, the spot price of natural gas at Henry Hub was near $3.00 per million British thermal units (MMBtu). By late November, that price had increased to more than $4.00/MMBtu.
“Revised forecasts for retail propane prices are attributable to new information from our Heating Oil and Propane Update, which collects data on a weekly basis in October through March. Retail propane prices in October and November have largely followed the previous winter’s price patterns despite wholesale propane prices that have been at least 10% less than the previous winter’s values.”
December 15, 2025 Principal contributor: Owen Comstock
Data source: U.S. Energy Information Administration, Winter Fuels Outlook
SHORT-TERM ENERGY OUTLOOK
Forecast overview
Global oil prices. We expect global oil inventories to continue to rise through 2026, putting downward pressure on oil prices in the coming months. We forecast the Brent crude oil price will fall to an average of $55 per barrel (b) in the first quarter of 2026 (1Q26) and remain near that price for the rest of next year. Although we expect crude oil prices to continue to fall in the coming months, we assess that both the OPEC+ production policy and China’s continued inventory builds will limit price declines.
Natural gas prices. The Henry Hub natural gas spot price in our forecast rises to an average of almost $4.30 per million British thermal units (MMBtu) this winter (November–March), more than 40 cents/MMBtu higher than we forecast in our November STEO. The revision is driven primarily by colder-than-expected weather in December which we expect will increase space heating demand. However, we expect milder-than-normal weather in early 2026 and rising production will help moderate natural gas prices following the winter, with the Henry Hub price averaging about $4.00/MMBtu next year.
Electricity generation. Forecast U.S. electricity generation by the power sector grows by 2.4% in 2025 and by 1.7% in 2026. This growth is in contrast to relatively flat generation from 2010 to 2020 and is primarily driven by increasing demand from large customers, including data centers, concentrated in regions managed by the Electric Reliability Council of Texas and the PJM Interconnection. We reduced our forecast for generation growth in 2026 compared with last month’s STEO based on how much large load electricity demand has come online so far this year and its implications for near-term growth.
Coal consumption. We expect coal consumption to increase by 9% in 2025 driven by an 11% increase in coal consumption in the electric power sector this year as both natural gas costs and electricity demand increased. Coal consumption is expected to fall in 2026 as electric power generation from renewable sources increases. However, coal production falls by less than consumption next year, supporting a small increase in coal exports and rising coal inventories.
Release Date: December 9, 2025
GEOPOLITICAL DEVELOPMENTS FACTOR IN HIGHER DIESEL PRICES
Global refinery margins for diesel have widened since late October and increased to their highest level all year, following refinery outages in Russia and in the Middle East and new sanctions on Russia’s crude oil, leading to limited refinery production and a decreased global diesel supply. The impact was most pronounced in the Atlantic Basin, contributing to higher prices at the Amsterdam, Rotterdam, Antwerp (ARA) shipping hub, a key benchmark for European prices, as well as at New York Harbor and the U.S. Gulf Coast. The higher global prices also affected prices in the United States because U.S. refiners can sell into both domestic and international markets.
Crack spreads indicate the profitability of refining crude oil into certain products. They’re calculated by subtracting the spot market price of a gallon of crude oil from the price of a gallon of refined product. Crack spreads for diesel fuel increased sharply from mid-October to mid-November, with spreads in New York Harbor, the U.S. Gulf Coast, and the ARA shipping hub all rising above $1 per gallon for the first time in over a year.
New EU sanctions against Russia have contributed to tight global diesel supply and rising crack spreads. In October 2025, the EU tightened restrictions on the major Russian oil companies Rosneft, Lukoil, and Gazprom Neft. That tightening followed EU sanctions against Russia implemented in July that included an import ban on refined products derived from Russia’s crude oil. The EU first banned the import of Russia’s crude oil and oil products from refineries in Russia, including diesel fuel, in late 2022 and early 2023 in response to Russia’s full-scale invasion of Ukraine.
The latest sanctions aim to diminish the value of Russia’s crude oil by targeting refineries in Türkiye and India, which have been processing discounted crude oil from Russia and exporting refined products, including diesel, to the EU.
Meanwhile, Ukraine’s attacks on Russia’s refinery and petroleum export facilities have curbed Russia’s product exports of the fuels. Reduced exports directly affect countries that have continued to import fuels from Russia. In the absence of discounted Russian volumes, these markets must instead bid for available volumes from other sources, further contributing to rising diesel prices.
Outside of Russia, an ongoing outage at Kuwait’s Al Zour refinery since late October has further tightened available refined products supplies. The Al Zour refinery came online in 2023 and helped provide fuel supplies to Europe after the implementation of the import ban on oil products from Russia earlier that year. The outage at Al Zour comes amid a relatively strong refinery maintenance season in the Middle East, as several other refineries in the region temporarily reduce their processing rates. In addition, the progress of refinery maintenance at the large Dangote refinery in Nigeria has received mixed reports, putting additional pressure on the Atlantic Basin market.
Sustained international demand amid constraints on international supply have contributed to increased demand for products from those refiners that remain operational. These refiners include refiners on the U.S. Gulf Coast, which supply most U.S. petroleum product exports. U.S. gasoline exports have risen to their highest levels so far this year, according to both our Weekly Petroleum Status Report and shipping data from Vortexa. U.S. distillate fuel oil exports, which include diesel, have also been high in November, relative to the five-year (2020–24) average.
Principal contributor: Kevin Hack
Data source: Bloomberg L.P.
Note: Data through November 26, 2025. All crack spreads are calculated against the Dated Brent crude oil spot price. lFON