When Can We Anticipate Home Heating Prices to Subside?
With winter weather settling in, homeowners in the U.S. are dealing with the challenge of home heating costs. Recent years have seen a remarkable increase in energy prices, leaving many in search of answers and relief. Learn what has an impact on home heating prices, the recent trends we’ve seen and tips to keep your utility bills in check.
Types of Home Heating Fuel
A number of fuels are used to heat homes in the United States:
- Natural gas heats 48% of American homes.
- Heating oil serves 5% of homes.
- Propane accounts for another 5%.
- Electricity warms 40% of U.S. homes. Fossil fuels are still the primary source for making 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 apparent that fossil fuels heat a great majority of North American households. Supply and demand is the number one factor driving price fluctuations. An increase in supply—triggered by more production and storage rates—generally lowers prices, while a surge in demand—brought about by severe weather, a booming 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, resulting in a general price decline throughout 2018. But, demand has surged recently across all sectors, causing natural gas prices to attain heights not seen in over a decade.
In 2022, the average wholesale cost of U.S. natural gas surged to its highest point since 2008, reaching 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 ever recorded.
Multiple factors led to the erratic 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 up. Robust liquefied natural gas (LNG) exports to Europe and elsewhere, coupled with a spike in domestic demand due to cold weather, stretched the price range even further.
In the spring of 2022, prices roared past $9/MMBtu, only to drop by 40% following the fire and subsequent shutdown at the Freeport LNG export terminal. This incident drastically cut U.S. LNG exports and redirected more natural gas to storage. However, as the summer heat faded, prices climbed once more, hitting a high point in late August.
Shifting into the fall, an increase in natural gas production and higher-than-average injections into storage saw prices fall closer to the five-year average. But, as temperatures dropped, the demand for heating caused prices to go up again.
When Will Fuel Rates Go Down?
The fluctuations in natural gas prices are indicative of the intricate interplay of factors influencing home heating costs. 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 potential for cost-saving opportunities.
As of late 2023, prices have come down from their previous highs because of robust production and reasonably moderate temperatures. Although demand remains steady, forecasters are predicting prices around $3.44/MMBtu this winter, providing some respite for individuals as we move through the heating season.
Tips to Reduce Your Heating Bill
Regardless of how you heat your home or what prices are like, you can take several helpful steps to boost energy efficiency and lower your heating costs. Here are a couple of 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 closing them each night to insulate your windows.
- Add more attic insulation to stop heat from rising out of your home.
- Install a smart thermostat that learns your routines and saves you money.
- Reduce 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 aren’t forced to crank up the thermostat.
- Plan 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.
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 well-being. Our work can also help bring down home heating costs, which is great news for your pocketbook. 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 involvement, you can trust Service Experts Heating, Air Conditioning & Plumbing to make a meaningful difference in your life and sense of comfort. For more information about heating prices in the U.S. or personalized tips 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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