When Can We Anticipate Home Heating Prices to Subside?
With winter weather intensifying, homeowners in the U.S. are experiencing the challenge of home heating costs. Recent years have seen a notable increase in energy prices, leaving many in search of answers and relief. Understand what affects home heating prices, the recent trends we’ve seen and tips to keep your utility bills in check.
Varieties of Home Heating Fuel
A number of fuels are used for home heating in the United States:
- Natural gas heats 48% of American homes.
- Heating oil is the fuel used in 5% of homes.
- Propane fuels another 5%.
- Electricity warms 40% of U.S. homes. Fossil fuels remain the main source for creating electricity in spite of the increase in renewable energy sources like wind and solar.
What Are the Key Influences on the Rates of Fossil Fuels?
According to the above information, it’s evident that fossil fuels heat a vast majority of North American households. Supply and demand is the number one factor creating price fluctuations. An increase in supply—triggered by greater production and storage rates—generally lowers prices, while a surge in demand—brought about by harsh weather, a flourishing economy and rising rates for alternative fuels—can cause prices to soar.
Exactly How Much Has the Price of Natural Gas Gone Up?
Domestic natural gas production outpaced consumption starting in 2017, causing a broad price decline in all of 2018. But, demand has surged recently across all sectors, causing natural gas prices to achieve heights not seen in over a decade.
In 2022, the average wholesale cost of U.S. natural gas hit its highest price since 2008, hitting an average of $6.45 per million British thermal units (MMBtu). This surge represented a major leap of greater than 53% from the previous year, marking it as one of the sharpest annual increases ever recorded.
Numerous factors added to the erratic rise and instability of natural gas prices last year. In early 2022, production hiccups caused by freeze-offs and a significant draw from natural gas reserves nudged prices way up. Robust liquefied natural gas (LNG) exports to Europe and other regions, coupled with an increase in domestic demand because of cold weather, stretched the price range even further.
In the spring of 2022, prices jumped past $9/MMBtu, only to fall by 40% following the fire and subsequent shutdown at the Freeport LNG export terminal. This incident sharply cut U.S. LNG exports and redirected more natural gas to storage. However, as the summer heat eased, prices climbed once more, peaking in late August.
Moving into the fall, a boost in natural gas production and higher-than-average injections into storage saw prices drop down closer to the five-year average. Yet, as temperatures went down, the demand for heating caused prices to go up once more.
When Will the Cost of Home Heating Fuel Cool Down?
The variations in natural gas prices highlight the intricate interplay of factors influencing home heating fuel rates. As we look ahead to the rest of the 2023-24 heating season, the market’s past behavior offers insights into future price changes and the possibility of cost-saving options.
As of late 2023, prices have come down from their previous highs thanks to robust production and reasonably mild temperatures. Even though demand remains steady, forecasters suggest prices around $3.44/MMBtu this winter, providing some respite for individuals as we move through the heating season.
Tips to Trim Your Heating Bill
Regardless of how you heat your home or what prices are like, you can take several easy steps to boost energy efficiency and lower your heating costs. Here are some ideas:
- Seal drafty windows and doors with caulk and weatherstripping.
- Use curtains to your advantage, making sure to pull them open during the day for free light and heat and then drawing them closed each night to insulate your windows.
- Increase your attic insulation to stop heat from rising out of your home.
- Buy a smart thermostat that learns your habits and saves you money.
- Dial down the temperature on your thermostat when you’re away so you aren’t spending money to heat an empty house.
- Put on warmer clothes indoors so you aren’t forced to crank up the thermostat.
- Make an appointment for seasonal furnace maintenance to keep your heating system in top shape.
- Set up a whole-house humidifier. Moist air feels warmer than dry air, so you feel more comfortable at a lower temperature.
Keep Cozy and Warm in the U.S. with Service Experts Heating, Air Conditioning & Plumbing
Nothing is more important to the Service Experts Heating, Air Conditioning & Plumbing team than your comfort and happiness in your home. Our heating solutions can also help bring down home heating costs, which is excellent news for your wallet. With ACE-certified technicians at the helm, you can expect quick, lasting answers to all your comfort needs. The assurance of a 100% satisfaction guarantee means that if you’re not completely happy with our services, you know we will make things right.
As a company that prides itself on innovation, customer engagement and community participation, you can trust Service Experts Heating, Air Conditioning & Plumbing to make a meaningful difference in your life and enjoyment of your residence. For more details of what you can expect with heating prices in the U.S. or personalized tips to help reduce your utility bills, reach out to the professionals at Service Experts Heating, Air Conditioning & Plumbing. Call 866-397-3787 today to learn more.
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