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The U.S. Energy Information Administration (EIA) is forecasting a 5% increase in residential natural gas consumption this winter over last year, based on projections of a colder winter in 2020-2021, and the fact that more consumers are working from their homes now during the day.
In its October 2020 Short-Term Energy Outlook, the EIA forecasts that residential natural gas consumption from October 2020 to March 2021 will average 21.1 billion cubic feet per day (Bcf/d), which is 5% more than last winter.
The EIA noted the National Oceanic and Atmospheric Administration (NOAA) expects the 2020-2021 winter to average 602 heating degree days (HDDs), which is nearly equal to the average of the previous 10 winters, and 5% more HDDs than last year.
Changes in consumer behavior in reaction to the COVID-19 pandemic will also contribute to more residential consumption of natural gas this winter. EIA expects work-from-home and virtual schooling policies to affect winter residential consumption because, with more people at home during the day, residential space heating demand will increase compared with last winter.
Nearly half of all U.S. homes are primarily heated with natural gas. As forecast in EIA’s Winter Fuels Outlook, the average retail price of residential natural gas this winter for homes that primarily use natural gas for heating will average $9.55 per thousand cubic feet (Mcf), down 2% from $9.73/Mcf last winter.
Despite lower natural gas prices, EIA forecasts more residential natural gas consumption will lead to an increase in household expenditures for homes that primarily heat with natural gas. EIA forecasts average household expenditures for these homes will rise to $572 this winter, an increase of $32 (6%) compared with last winter.