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 Short-Term U.S. Macroeconomic Model to produce a conditional macroeconomic 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 1.5% in 2026 relative to 2025 and remain flat in in 2027. In 2026, decreases in CO₂ emissions primarily reflect expected declines in coal consumption and, to a lesser extent, declines in consumption of various petroleum products, most notably motor gasoline and distillate fuel oil. Declines in coal-related emissions are expected to continue in 2027 but are offset by rising natural gas-related emissions, largely from consumption growth in the commercial and industrial sectors.

Weather
Our forecast assumes a cooler-than-average October as we shift into the 2026–2027 winter heating season (November–March). Based on our current forecasts and data from the National Oceanic and Atmospheric Administration, we expect the United States to average 236 heating degree days (HDDs) in October, 7% more than the 10-year average for the month. Despite a cooler start to the fourth quarter of 2026, our forecast assumes milder weather in November and December, bringing the quarterly average to around 1,430 HDDs—slightly less than the 10-year quarterly average.

Overall, we expect this winter will be slightly warmer than normal, with an average of 3,150 HDDs, 3% fewer HDDs than the previous 10-year winter average, reducing overall energy use for space heating this winter. Our expectations for energy expenditures for the 2026–2027 winter season are outlined in our Winter Fuels Outlook.