When Can We Anticipate Home Heating Prices to Subside?

With winter weather settling in, homeowners in the U.S. are experiencing the pain of home heating costs. Recent years have seen a remarkable rise in energy costs, leaving many searching for answers and relief. Uncover what affects home heating prices, the recent trends we’ve seen and ways to keep your utility bills in check.

Different Kinds 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 fuels another 5%.
  • Electricity warms 40% of U.S. homes. Fossil fuels remain the primary source for generating electricity despite the surge in interest in renewable energy sources like wind and solar. 

What Affects the Rates of Fossil Fuels?

Based on the above information, it’s clear that fossil fuels heat a large majority of North American households. Supply and demand is the biggest factor generating price fluctuations. An increase in supply—triggered by greater 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 a broad price decline in all of 2018. However, demand has increased significantly recently across all sectors, causing natural gas prices to attain heights not seen in roughly a 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 greater than 53% from the previous year, marking it as one of the steepest annual increases on record.

Several factors led to the volatile rise and instability of natural gas prices last year. In early 2022, production hiccups caused by freeze-offs and a large draw from natural gas reserves nudged prices way up. Robust liquefied natural gas (LNG) exports to Europe and other countries, coupled with a surge in domestic demand because of 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 into storage. Unfortunately, as the summer heat eased, prices climbed once again, reaching a peak in late August.

Going into the fall, an uptick in natural gas production and higher-than-average injections into storage saw prices drop down closer to the five-year average. However, as temperatures dropped, the demand for heating caused prices to go up one more time.

When Will the Cost of Home Heating Fuel Go Down?

The fluctuations in natural gas prices highlight the intricate interplay of factors influencing home heating prices. As we look ahead to the rest of the 2023-24 heating season, the market’s past behavior offers insights into future price patterns and the prospect of cost-saving measures.

As of late 2023, prices have decreased from their previous highs due to robust production and relatively mellow temperatures. While demand is still steady, forecasters anticipate prices around $3.44/MMBtu this winter, providing some respite for house owners as we move through the heating season.

Ways to Trim Your Heating Bill

No matter 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 a few strategies:

  • 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 pulling them back over the windows each night to insulate your windows.
  • Boost attic insulation to keep heat from rising out of your home.
  • Install a smart thermostat that learns your routines and helps you save money.
  • Reduce the temperature on your thermostat when you’re out to avoid overheating an empty house.
  • Wear warmer clothes inside the home so you don’t need to crank up the thermostat.
  • Schedule seasonal furnace maintenance to keep your heating system in peak condition.
  • Set up a whole-house humidifier. Moist air feels warmer than dry air, so you feel more cozy at a lower temperature.

Make Your Home Warm 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 heating solutions can also help reduce home heating costs, which is great news for your bank account. With ACE-certified technicians at the helm, you can expect quality, durable solutions to all your comfort needs. The assurance of a 100% satisfaction guarantee means that if you’re not truly 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 information about heating prices in the U.S. or personalized tips to help minimize your utility bills, contact the professionals at Service Experts Heating, Air Conditioning & Plumbing. Call 866-397-3787 today to learn more.

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