When Are Home Heating Prices Expected to Go Down?
With winter weather settling in, homeowners in the U.S. are facing the problem of home heating costs. Recent years have seen a notable rise in energy costs, leaving many looking for answers and relief. Understand what affects home heating prices, the recent trends we’ve seen and ways to keep your utility bills in check.
Types of Home Heating Fuel
Several fuels are used to keep homes warm and cozy 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 continue to be the most used source for making electricity in spite of the surge in interest in renewable energy sources like wind and solar.
What Factors Impact the Cost of Fossil Fuels?
According to the above information, it’s clear that fossil fuels heat a vast majority of North American households. Supply and demand is the number one factor generating price fluctuations. An increase in supply—triggered by higher production and storage rates—typically lowers prices, while an increase in demand—caused by harsh weather, a booming economy and rising rates for alternative fuels—can cause prices to soar.
Exactly How Much Has the Cost of Natural Gas Risen?
Domestic natural gas production outpaced consumption starting in 2017, leading to a broad price decline in all of 2018. Unfortunately, demand has surged recently across all sectors, causing natural gas prices to hit heights not seen in more than decade.
In 2022, the average wholesale cost of U.S. natural gas surged to its highest price since 2008, attaining an average of $6.45 per million British thermal units (MMBtu). This huge spike represented a major leap of over 53% from the previous year, marking it as one of the steepest annual increases on record.
Numerous factors led to the volatile rise and lack of stability of natural gas prices last year. In early 2022, processing hiccups caused by freeze-offs and a significant draw from natural gas reserves nudged prices up. Robust liquefied natural gas (LNG) exports to Europe and other countries, coupled with a surge in domestic demand caused by cold weather, stretched the price range even further.
In the spring of 2022, prices roared past $9/MMBtu, only to tumble by 40% following the fire and subsequent stoppage at the Freeport LNG export terminal. This incident drastically cut U.S. LNG exports and redirected more natural gas toward storage. But, as the summer heat faded, prices climbed once more, peaking in late August.
Going into the fall, a boost in natural gas production and higher-than-average injections into storage saw prices fall closer to the five-year average. However, as temperatures went down, the demand for heating caused prices to rise once more.
When Will the Cost of Home Heating Fuel Calm Down?
The changes in natural gas prices underscore the complex interplay of factors influencing home heating prices. As we look forward to the rest of the 2023-24 heating season, the market’s past behavior offers insights into future price patterns and the possibility of cost-saving options.
As of late 2023, prices have come down from their previous highs because of robust production and relatively mild temperatures. Although demand is still steady, forecasters anticipate prices around $3.44/MMBtu this winter, providing some respite for property owners as we move through the heating season.
Ways to Reduce Your Heating Bill
Regardless of how you heat your home or what prices are like, you can take several practical steps to boost energy efficiency and cut your heating costs. Here are some suggestions:
- Seal drafty windows and doors with caulk and weatherstripping.
- Use curtains to your advantage, opening them during the day for free light and heat and then pulling them back over the windows at night to insulate your windows.
- Add more attic insulation to keep heat from rising out of your home.
- Buy a smart thermostat that learns your habits and saves you money.
- Reduce the temperature on your thermostat when you’re not home so you aren’t spending money to heat an empty house.
- Don warmer clothes inside your residence so you aren’t forced to crank up the thermostat.
- Schedule seasonal furnace maintenance to keep your heating system in top shape.
- Install 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 more critical to the Service Experts Heating, Air Conditioning & Plumbing team than your comfort and safety. Our work can also help reduce home heating costs, which is great news for your wallet. With ACE-certified technicians at the helm, you can expect fast, long-lasting answers to all your comfort needs. Our 100% satisfaction guarantee means that if you’re not totally 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 participation, you can trust Service Experts Heating, Air Conditioning & Plumbing to make a positive difference in your life and enjoyment in your home. For more details of what you can expect with heating prices in the U.S. or personalized methods to help minimize your utility bills, get a hold of the professionals at Service Experts Heating, Air Conditioning & Plumbing. Call 866-397-3787 today to learn more.
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