WASHINGTON (Reuters) - The average U.S. household will pay 8 percent less in heating fuel costs this winter -- a savings of about $84 -- with natural gas and propane users enjoying the biggest drop in cost, the Energy Department's forecasting arm said on Tuesday.
This winter's heating bills will be lower thanks to cheaper fuel prices, plenty of fuel supplies and expected slightly milder weather compared with last winter, according to the U.S. Energy Information Administration.
"Inventories of all heating fuels are currently well above levels seen at the start of last winter," the EIA said. The agency's forecast covers the U.S. winter heating season that runs from October through next March.
The large fuel inventories will help mitigate any increases in energy prices if the winter is colder than expected, the agency said.
Winter expenses are forecast to be 11.8 percent ($105) lower for natural gas, 2.2 percent ($40) less for heating oil, 14.2 percent ($280) cheaper for propane and 2 percent ($20) less for electricity, the EIA said in its annual winter outlook.
At the same time, demand for natural gas is expected to be down 1.1 percent this winter, with consumption of heating oil down 1.9 percent, propane down 0.6 percent and electricity up 0.1 percent, the agency said
The average price for heating oil in the Northeast, which accounts for 80 percent of U.S. heating oil demand, is forecast to average $2.64 a gallon this winter season, down 2 cents from last winter, the EIA said.
U.S. crude oil prices are expected average $70 a barrel throughout the winter, about $19 more than last winter, the agency said.