spot price will average about $ 2.65 per million British thermal units ( MMBtu ) in 2Q23 as natural gas inventories begin to rise . With inventories remaining above the five-year average in 2023 , we expect natural gas prices to average less than $ 3.00 / MMBtu for 2023 , a more than 50 % decrease from last year .
U . S . electricity demand in 2Q23 in our forecast is down about 1 % from the same period last year . The drop in demand largely reflects our expectation for milder temperatures than last year . Less demand , along with growing generation from renewable energy sources and lower natural gas prices significantly lower electric power prices in our forecast for 2Q23 and 3Q23 compared with the same periods in 2022 . U . S . Energy Information Administration Release Date : Apr . 11 , 2023 | Forecast Completed : Apr . 6 , 2023
U . S . RECORDS REDUCED HEATING FUEL CONSUMPTION
EIA estimates that U . S . households consumed less heating oil this winter heating season because of warmer-than-expected temperatures than we estimated at the beginning of the winter heating season . Combined with stable heating oil prices , our current estimate of average household heating costs for this winter is lower compared with our forecast in the Winter Fuels Outlook ( WFO ), a supplement to the October 2022 Short-Term Energy Outlook ( STEO ). Since October , our estimates of heating oil consumption fell by 9 % and prices by 2 %.
STEO publishes WFO tables during the winter heating season ( October 1 – March 30 ). In our final WFO update , we estimated that the average U . S . household that uses heating oil as its primary space heating fuel consumed 470 gallons of heating oil this winter , down 9 % from the October estimate of 519 gallons . Warmer-thannormal winter temperatures reduced consumption , particularly in the Northeast . Overall , 4 % of U . S . households use heating oil as the primary space heating fuel , mostly located in the Northeast .
In the March WFO , we estimated that consumer prices averaged $ 4.45 per gallon , slightly ($ 0.09 ) lower than we forecast in October . We expect U . S . household expenditures for heating oil to average $ 2,094 for the 2022 – 23 winter heating season , down more than 11 % from the initial October estimate of $ 2,354 . Although heating oil costs are lower than we had previously expected , the cost was 13 % higher compared with the 2021 – 22 winter heating season .
At the beginning of the winter , we expected that Russia ’ s fullscale invasion of Ukraine and subsequent sanctions would limit Europe ’ s supply of heating oil , and record-high natural gas prices would lead to fuel switching from natural gas to distillate fuel ( which includes heating oil and diesel fuel ), contributing to higher heating oil prices . Warmer-than-normal winter temperatures in Europe reduced distillate demand below our initial estimates , and imports into Europe from the Middle East and Asia helped offset the loss
www . fueloilnews . com | FUEL OIL NEWS | MAY 2023 11