When Can We Anticipate Home Heating Prices to Subside?
With winter weather hitting hard, homeowners in the U.S. are experiencing the challenge of home heating costs. Recent years have seen a noteworthy jump 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.
Varieties of Home Heating Fuel
A number of 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 primary source for creating electricity even with the surge in interest in renewable energy sources like wind and solar.
What Are the Key Influences on the Cost of Fossil Fuels?
Considering the above information, it’s evident that fossil fuels heat a great majority of North American households. Supply and demand is the number one factor creating price fluctuations. An increase in supply—triggered by more production and storage rates—generally lowers prices, while a surge in demand—caused by severe weather, a booming economy and rising rates for alternative fuels—can cause prices to skyrocket.
Exactly How Much Has the Price of Natural Gas Gone Up?
Domestic natural gas production outpaced consumption starting in 2017, causing a general price decline through 2018. Unfortunately, demand has increased significantly recently across all sectors, causing natural gas prices to attain heights not seen in more than decade.
In 2022, the average wholesale cost of U.S. natural gas reached its highest point since 2008, reaching an average of $6.45 per million British thermal units (MMBtu). This surge represented a significant leap of more than 53% from the previous year, marking it as one of the steepest annual increases ever recorded.
Many factors added to the unpredictable rise and uncertainty 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, combined with a spike in domestic demand because of cold weather, stretched the price range even further.
In the spring of 2022, prices soared past $9/MMBtu, only to tumble by 40% following the fire and subsequent stoppage at the Freeport LNG export terminal. This incident considerably cut U.S. LNG exports and redirected more natural gas into storage. Unfortunately, as the summer heat ebbed, prices climbed once again, peaking in late August.
Shifting 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. Yet, as temperatures fell, the demand for heating caused prices to ascend once more.
When Will Fuel Rates Calm Down?
The changes in natural gas prices underscore the complicated 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 trends and the prospect of cost-saving measures.
As of late 2023, prices have fallen from their previous highs due to robust production and relatively mild temperatures. Although demand remains steady, forecasters are predicting prices around $3.44/MMBtu this winter, giving some respite for house owners as we move through the heating season.
Tips to Cut Your Heating Bill
Regardless of how you heat your home or what prices are like, you can take several practical steps to increase energy efficiency and reduce your heating expenses. Here are some ideas:
- 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.
- Boost attic insulation to prevent heat from rising out of your home.
- Buy a smart thermostat that learns your behavior and adjusts the temperature accordingly to help reduce your energy usage.
- Lower the temperature on your thermostat when you’re out so you aren’t heating an empty house.
- Don warmer clothes inside the home so you do not have to crank up the thermostat.
- Schedule annual 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.
Keep Cozy and 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 safety. Our services can also help lower home heating costs, which is good news for your pocketbook. With ACE-certified technicians at the helm, you can expect quality, durable remedies to all your comfort needs. The assurance of a 100% satisfaction guarantee means that if you’re not totally happy with our services, we promise 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 significant difference in your life and enjoyment of your residence. For more information about heating prices in the U.S. or personalized methods to help reduce 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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