Economy, weather, and CO₂

U.S. macroeconomics
To generate the macroeconomic assumptions in the Short-Term Energy Outlook (STEO), we input STEO energy price forecasts into S&P Global’s macroeconomic model and produce a conditional forecast. For more details on the macroeconomic model, see our documentation.

Emissions
We forecast U.S. energy-related carbon dioxide (CO₂) emissions to decrease by 1.4% in 2026 relative to 2025 and to decrease by an additional 0.5% in 2027 relative to 2026. In both years, decreases in CO₂ emissions are due primarily to expected declines in coal consumption, most of which occurs at power plants for electricity generation.

Weather
The United States experienced colder-than-normal temperatures toward the end of January as Winter Storm Fern affected significant portions of the country. As a result, we have revised our heating degree day (HDD) forecast for the 2025‒2026 winter heating season (November—March) up by 5%, supported by an 12% increase in January HDDs, compared with the January STEO. The cooler-than-normal temperatures are expected to extend into the first week of February, increasing overall demand for space heating this winter.

Based on our current forecasts and data from the National Oceanic and Atmospheric Administration, we forecast that the United States will average around 2,117 HDDs in the first quarter of 2026, 5% more HDDs than the 10-year average. Overall, we expect this winter will average around 3,330 HDDs, 3% more than both the previous winter and the 10-year winter average.