Gas prices slip below $4 a gallon as federal forecasters see a milder winter heating bill for most households

The national average price of gasoline fell below $4 a gallon on Monday for the first time in several weeks, according to AAA, as the federal government's chief energy forecaster released an updated outlook predicting that most American households will pay less to heat their homes this winter than they did last year.

The U.S. Energy Information Administration's November Short-Term Energy Outlook, published Monday and based on data through Nov. 5, trimmed its forecast for natural gas prices through the heart of the winter heating season. The agency now expects the benchmark Henry Hub spot price to average $2.87 per million British thermal units from November through March, about 16 percent below what it had projected only a month earlier. EIA attributed the revision to an unusually mild start to November and natural gas inventories that remain comfortably above their five-year average heading into the cold-weather months.

Separately, AAA's daily price survey put the national average for regular gasoline at $3.9788 a gallon on Monday, down from $4.1493 a week earlier and $4.3669 a month ago, though still nearly 30 percent above the $3.0707 average recorded a year ago. The two developments, arriving the same week that millions of Americans begin planning Thanksgiving travel, point to a household budget picture that is improving in some categories even as it remains volatile year over year.

A mixed winter, with natural gas users coming out ahead

The November outlook builds on EIA's Winter Fuels Outlook, first published Oct. 6, which forecasts household heating expenditures for the November-through-March period by fuel type. That report projected that households heating primarily with natural gas — roughly 61 million homes, the single largest group in the country — would spend an average of $640 for the season, a 9 percent decline from last winter, driven by lower fuel prices even though the agency expects the season to be about as cold nationally as the last one.

Propane households, about 6.4 million nationwide, are projected to see a smaller decline of roughly 3 percent, to $1,246. Those two fuels together cover roughly half of all U.S. homes.

The picture is less favorable for the remainder. Households heating primarily with electricity — about 58 million homes, concentrated heavily in the South — are projected to spend an average of $1,196 this winter, 4 percent more than last year, as electricity rates continue to climb nationally. The steepest increase by far falls on the roughly 4.1 million households that heat with oil, more than 80 percent of them in the Northeast: EIA projects their average winter bill at $2,115, a 21 percent jump, reflecting a 34 percent rise in the price of heating oil that is only partly offset by a milder forecast for the Northeast than the region saw a year ago.

Why the forecast keeps shifting

EIA's monthly reports are built on a mix of weather modeling, commodity-futures pricing and inventory data, and the agency revises its numbers every month as those inputs change — which is why the November update to the natural gas forecast moved markedly lower even though the underlying winter fuels report is barely a month old. Mild temperatures through early November reduced near-term heating demand, allowing gas in storage to build further above its already-healthy seasonal average, which in turn pushed spot prices down.

The agency has cautioned that the official baseline assumes a winter close to the 10-year average nationally, but with a warmer-than-normal Northeast, a much colder-than-normal West, and the Midwest and South close to normal — and that a strong El Niño pattern this winter could push temperatures, and therefore heating demand and bills, in either direction from that baseline in any given region.

"Relatively high natural gas inventories entering the winter season provide a cushion for heating demand," EIA Administrator Tristan Abbey said when the agency released its winter outlook in October.

Gasoline and diesel still running hot by historical standards

On the road, the picture for 2027 is more mixed than Monday's dip below $4 might suggest. EIA's November outlook forecasts an average U.S. gasoline price of $3.89 a gallon for 2026 as a whole and $3.73 a gallon for 2027 — the 2027 figure revised upward about 5 percent from last month's projection of $3.56. Diesel, which factors into the cost of shipping and trucked goods and therefore into retail prices more broadly, is forecast to average $5.25 a gallon in 2026 and $5.03 in 2027, with the 2027 number revised up roughly 12 percent from last month on continued tightness in global distillate markets.

That tightness is also what is driving up heating-oil costs for Northeast households, since heating oil and diesel are both distillate fuel products competing for the same limited refining capacity. EIA has noted that U.S. distillate inventories were running well below their five-year seasonal average heading into the winter, a gap it expects to persist into early 2027.

Who is watching, and what comes next

The monthly outlook carries practical weight beyond the data itself: utilities, state energy-assistance offices and budget-conscious households use it to anticipate bills, and energy traders use it to position for the winter. Lower-income households that qualify for the federal Low Income Home Energy Assistance Program, as well as households in the Northeast on fixed incomes who rely on heating oil, are the groups with the most at stake in the oil-price side of the forecast, since that is the fuel where EIA's own numbers show the sharpest increase.

EIA is scheduled to release its next monthly update on Dec. 8, by which point more of the winter's actual weather will have arrived and the agency's near-term forecasts, particularly for natural gas, are likely to firm up. AAA's gas price tracker updates daily and has shown prices swinging by more than a dollar a gallon over the course of 2026, including an earlier dip below $4 last June that AAA's newsroom described at the time as tied to summer travel demand and refinery output rather than a lasting trend. Analysts at the agency and elsewhere caution that any of several factors — a cold snap, a change in OPEC+ production policy, or a disruption in distillate supply — could move the numbers again before winter is over.