U.S. Petroleum and Other Liquids
Between the beginning of October and the end of February, U.S. average heating degree days were 13% higher than last winter (indicating colder weather) and 10% above the 10-year average. The Northeast was 13% colder than last winter, the Midwest and South both 19% colder, while the West was 5% warmer. The cold weather had the greatest effect on households in the Midwest that primarily use propane and those in the Northeast that rely on heating oil. EIA's current estimate for winter heating expenditures for homes heating with propane in the Midwest is $2,212, which is $759 higher than projected in October. The current estimate for average U.S. expenditures for homes using heating oil is $2,243, which is $197 higher than projected in the October STEO. Unlike residential electricity and natural gas markets, where rates paid by consumers do not immediately reflect price spikes in the spot market, price movements in propane and heating oil are quickly reflected in retail prices.
U.S. Liquid Fuels Consumption
Total U.S. liquid fuels consumption rose by an estimated 400,000 bbl/d (2.1%) in 2013. Consumption of hydrocarbon gas liquids registered the largest gain, increasing by 150,000 bbl/d (6.4%). Motor gasoline consumption grew by 90,000 bbl/d (1.1%), the largest increase since 2006. Stronger-than-expected growth in highway travel during the second half of 2013 contributed to that increase. Distillate fuel consumption increased by 90,000 bbl/d (2.5%), reflecting colder weather and domestic economic growth.
Projected total liquid fuels consumption remains flat in 2014. Motor gasoline consumption remains largely unchanged as the recent strong growth in highway travel slows and continued improvements in new-vehicle fuel economy boost overall fuel efficiency growth. Distillate fuel oil consumption rises 10,000 bbl/d (0.3%). In 2015, total liquid fuels consumption increases by 100,000 bbl/d (0.5%), driven primarily by increasing transportation demand for distillate fuel oil and industrial demand for hydrocarbon gas liquids.
U.S. Liquid Fuels Supply
Harsh winter conditions over the past few months negatively affected well completion activity in the northern U.S. plays. As more evidence of this seasonal slowdown has appeared in the data, EIA has revised downward initial estimates for December 2013 and January 2014 U.S. crude oil production. Because the weather effects are temporary, much of the production slowdown is expected to be made up by accelerated completion activity over the next few months.