When Are Home Heating Prices Expected to Go Down?
With winter weather settling in, homeowners in the U.S. are dealing with the challenge of home heating costs. Recent years have seen a notable jump in energy costs, leaving many in search of answers and relief. Understand what affects home heating prices, the recent trends we’ve seen and strategies to keep your utility bills in check.
Varieties of Home Heating Fuel
Many fuels are used for home heating in the United States:
- Natural gas heats 48% of American homes.
- Heating oil is the fuel used in 5% of homes.
- Propane is used in another 5%.
- Electricity warms 40% of U.S. homes. Fossil fuels continue to be the main source for making electricity despite the increase in renewable energy sources like wind and solar.
What Factors Impact the Cost of Fossil Fuels?
According to the above information, it’s apparent that fossil fuels heat a large 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—typically lowers prices, while an increase in demand—triggered by severe weather, a thriving 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 throughout 2018. Unfortunately, demand has increased significantly recently across all sectors, causing natural gas prices to achieve heights not seen in more than 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 surge represented a significant leap of greater than 53% from the previous year, marking it as one of the steepest annual increases on record.
Numerous factors added to the erratic 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, combined with an increase in domestic demand because of cold weather, stretched the price range even further.
In the spring of 2022, prices jumped past $9/MMBtu, only to drop by 40% following the fire and subsequent closure of 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 eased, prices climbed again, hitting a high point 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. However, as temperatures went down, the demand for heating caused prices to ascend once more.
When Will the Cost of Home Heating Fuel Go Down?
The fluctuations in natural gas prices are indicative of the complicated interplay of factors influencing home heating fuel rates. As we look ahead 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 options.
As of late 2023, prices have come down from their previous highs due to robust production and relatively mild temperatures. Even though demand continues to be steady, forecasters anticipate prices around $3.44/MMBtu this winter, offering some respite for homeowners as we move through the heating season.
Ways to Cut Your Heating Bill
No matter how you heat your home or what prices are like, you can take several helpful steps to boost energy efficiency and reduce your heating bills. Here are a few ideas:
- 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 prevent heat from rising out of your home.
- Invest in a smart thermostat that learns your behavior and helps you save money.
- Dial down the temperature on your thermostat when you’re out to avoid overheating an empty house.
- Wear warmer clothes indoors so you do not have to crank up the thermostat.
- Schedule seasonal furnace maintenance to keep your heating system in good working order.
- 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 more critical to the Service Experts Heating, Air Conditioning & Plumbing team than your comfort and well-being. Our services can also help bring down home heating costs, which is great news for your wallet. With ACE-certified technicians at the helm, you can expect quality, lasting answers to all your comfort needs. Our company’s 100% satisfaction guarantee means that if you’re not totally happy with our services, you know we will 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 enjoyment in your home. For more information about heating prices in the U.S. or personalized tips to help lower 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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