Last reviewed: September 2026 · By the HVAC Brief Editorial Team · Our sourcing and editorial standards
EIA forecasts residential heating oil will average $5.30 a gallon across this winter, up 35% on last winter, while residential natural gas is forecast 9% cheaper. The fourth quarter of 2026 alone is forecast at $5.66, 54% above the same quarter of 2025.
That split reshuffles the cost of heat. At forecast prices, heat from an oil furnace costs about $46.10 per million Btu, far closer to electric resistance heat ($53.37) than to a gas furnace ($16.43).
The forecast, fuel by fuel
We define a winter as the fourth quarter plus the following first quarter, and compare EIA’s forecast for 2026/27 with the same two quarters of 2025/26 from the same report.
| Fuel | Unit | Winter 2025/26 | Winter 2026/27 forecast | Change |
|---|---|---|---|---|
| Heating oil | $ per gallon | 3.94 | 5.30 | +34.5% |
| Natural gas | $ per Mcf | 14.96 | 13.62 | -9.0% |
| Propane | $ per gallon | 2.56 | 2.44 | -4.9% |
| Electricity | cents per kWh | 17.73 | 18.21 | +2.7% |
Heating oil is the outlier. Electricity edges up 2.7%, propane slips 4.9%, and gas falls. Households on oil face the largest change of any heating fuel by a wide margin.
Quarter by quarter
| Fuel | Q4 2025 | Q1 2026 | Q4 2026 forecast | Q1 2027 forecast |
|---|---|---|---|---|
| Heating oil | 3.68 | 4.20 | 5.66 | 4.94 |
| Natural gas | 15.14 | 14.77 | 14.17 | 13.06 |
| Propane | 2.48 | 2.64 | 2.43 | 2.44 |
| Electricity | 17.63 | 17.83 | 18.13 | 18.29 |
The heating oil forecast peaks in the fourth quarter and eases into 2027. The same EIA table shows the wholesale fuel oil price at $4.18 a gallon in the fourth quarter of 2026 against $2.23 a year earlier, and the West Texas Intermediate crude price averaging $95.48 a barrel in the second quarter of 2026 against $64.63 a year before. Retail heating oil follows the distillate market.
What that does to the cost of heat
Fuel prices only compare properly once converted to a common unit of delivered heat. Using EIA heat content factors and federal minimum efficiencies, as on our cost of heat page:
| System | Winter 2025/26 | Winter 2026/27 forecast | Change |
|---|---|---|---|
| Gas furnace, 80% AFUE | $18.04 | $16.43 | -9.0% |
| Air-source heat pump, HSPF2 7.5 | $23.64 | $24.28 | +2.7% |
| Propane furnace, 80% AFUE | $34.99 | $33.28 | -4.9% |
| Oil furnace, 83% AFUE | $34.27 | $46.10 | +34.5% |
| Electric resistance | $51.96 | $53.37 | +2.7% |
Last winter an oil furnace and a propane furnace delivered heat at similar cost. This winter, on EIA’s forecast, oil heat costs about 1.4 times as much as propane heat and 2.8 times as much as gas heat.
The fuel price is out of your hands; consumption is not. An oil burner that has not been serviced wastes fuel through a dirty nozzle and poor combustion, so a pre-season service matters more in an expensive year. Our furnace maintenance checklist covers what that visit should include, and our heating oil price series tracks the weekly retail price once EIA’s survey restarts in October.
What this forecast is and is not
This is EIA’s Short-Term Energy Outlook, released September 9, 2026, with modelling completed September 3. It is a forecast and will be revised monthly; EIA’s October outlook normally includes a dedicated winter fuels analysis.
These are national averages. Heating oil is concentrated in the Northeast, and regional prices differ. The heat pump comparison uses a federal minimum rating, and real cold-climate performance is lower, as explained in heat pump versus gas furnace.
Frequently asked questions
Will heating oil be more expensive this winter?
EIA forecasts it will. Its September 2026 outlook puts residential heating oil at $5.66 a gallon in the fourth quarter of 2026 and $4.94 in the first quarter of 2027, an average of $5.30 against $3.94 last winter, up 35%.
Will natural gas heating cost more this winter?
EIA forecasts less. Residential natural gas is forecast at $13.62 per thousand cubic feet across the fourth quarter of 2026 and first quarter of 2027, 9% below the $14.96 average for the same quarters a year earlier.
What is the cheapest way to heat this winter?
On EIA’s national forecast and federal minimum efficiencies, a gas furnace at about $16.43 per million Btu of delivered heat, followed by a heat pump at about $24.28, propane at $33.28, oil at $46.10 and electric resistance at $53.37. Local prices and equipment efficiency change the order.
Why are heating oil prices going up?
Retail heating oil follows the distillate fuel market. EIA’s table shows wholesale fuel oil forecast at $4.18 a gallon in the fourth quarter of 2026 against $2.23 a year earlier, and crude oil prices substantially higher in 2026 than 2025. EIA does not attribute the forecast to a single cause in the table.
Methodology and limitations
Prices are from EIA Short-Term Energy Outlook, September 2026, Table 2. Winter averages are the simple mean of the fourth quarter and the following first quarter. Heat cost uses EIA heat content factors and federal minimum efficiencies, as documented on our fuel cost page.
- 2026 third and fourth quarter and 2027 values are forecasts and will be revised.
- National averages; regional prices, especially for heating oil and propane, differ.
- Delivered cost excludes fixed charges, delivery fees and equipment differences.
Sources
- US Energy Information Administration, Short-Term Energy Outlook, September 2026, Table 2, Energy Prices.
- Code of Federal Regulations, 10 CFR 430.32, furnace and heat pump efficiency standards.
The HVAC Brief is an independent trade publication. We do not sell equipment, take manufacturer advertising, or accept payment for placement in our research. Corrections welcome.
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