When Can We Anticipate Home Heating Prices to Subside?

With winter weather settling in, homeowners in the U.S. are facing the problem of home heating costs. Recent years have seen a notable jump in energy rates, leaving many looking for answers and relief. Understand what has an impact on home heating prices, the recent trends we’ve seen and ways to keep your utility bills in check.

Types 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 heats 5% of homes.
  • Propane is used in another 5%.
  • Electricity warms 40% of U.S. homes. Fossil fuels are still the main source for generating electricity in spite of the renewed focus on renewable energy sources like wind and solar. 

What Factors Impact the Rates of Fossil Fuels?

According to the above information, it’s apparent that fossil fuels heat a great majority of North American households. Supply and demand is the number one factor generating price fluctuations. An increase in supply—triggered by more production and storage rates—generally lowers prices, while a surge in demand—caused by harsh weather, a thriving economy and rising rates for alternative fuels—can cause prices to climb.

Exactly How Much Has the Cost of Natural Gas Risen?

Domestic natural gas production outpaced consumption starting in 2017, causing an overall price decline through 2018. Unfortunately, demand has surged recently across all sectors, causing natural gas prices to hit heights not seen in over a decade.

In 2022, the average wholesale cost of U.S. natural gas hit its highest point since 2008, hitting an average of $6.45 per million British thermal units (MMBtu). This huge spike represented a tremendous leap of over 53% from the previous year, marking it as one of the biggest annual increases ever recorded.

A number of factors added to the volatile rise and uncertainty of natural gas prices last year. In early 2022, manufacturing hiccups caused by freeze-offs and a substantial draw from natural gas reserves nudged prices upward. Robust liquefied natural gas (LNG) exports to Europe and elsewhere, paired with a surge in domestic demand caused by 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 closure of the Freeport LNG export terminal. This incident drastically cut U.S. LNG exports and redirected more natural gas into storage. Unfortunately, as the summer heat eased, prices climbed once more, reaching a peak in late August.

Shifting 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 ascend one more time.

When Will Fuel Rates Calm Down?

The variations in natural gas prices underscore the intricate interplay of factors influencing home heating fuel rates. As we look onward 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 opportunities.

As of late 2023, prices have decreased from their previous highs because of robust production and relatively moderate temperatures. While demand continues to be steady, forecasters suggest prices around $3.44/MMBtu this winter, giving some respite for homeowners as we move through the heating season.

Tricks to Trim Your Heating Bill

It doesn’t matter how you heat your home or what prices are like, you can take several helpful steps to increase energy efficiency and cut your heating costs. Here are a couple of suggestions:

  • Seal drafty windows and doors with caulk and weatherstripping.
  • Use curtains to your advantage, throwing them open during the day for free light and heat and then drawing them closed in the evenings to insulate your windows.
  • Add more attic insulation to keep heat from rising out of your home.
  • Install a smart thermostat that learns your routines and helps you save money.
  • Dial down the temperature on your thermostat when you’re out so you aren’t spending money to heat an empty house.
  • Put on warmer clothes indoors so you do not have 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.

Bring Comfort Home in the U.S. with Service Experts Heating, Air Conditioning & Plumbing

Nothing is of greater importance to the Service Experts Heating, Air Conditioning & Plumbing team than your comfort and happiness in your home. Our services can also help bring down home heating costs, which is great news for your bank account. With ACE-certified technicians at the helm, you can expect quick, lasting remedies to all your comfort needs. Our company’s 100% satisfaction guarantee means that if you’re not truly happy with our services, you can count on us to make things right.

As a company that prides itself on innovation, customer engagement and community support, you can trust Service Experts Heating, Air Conditioning & Plumbing to make a meaningful difference in your life and enjoyment in your home. For more insights into heating prices in the U.S. or personalized methods to help minimize 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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