When Can We Anticipate Home Heating Prices to Subside?

With winter weather intensifying, homeowners in the U.S. are facing the challenge of home heating costs. Recent years have seen a noteworthy rise in energy rates, leaving many looking for answers and relief. Learn 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

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 continue to be the primary source for generating electricity despite 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 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 higher production and storage rates—typically lowers prices, while a surge in demand—caused by severe weather, a flourishing economy and rising rates for alternative fuels—can cause prices to skyrocket.

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. Unfortunately, demand has soared recently across all sectors, causing natural gas prices to achieve heights not seen in over a decade.

In 2022, the average wholesale cost of U.S. natural gas reached its highest point since 2008, attaining an average of $6.45 per million British thermal units (MMBtu). This surge represented a tremendous leap of more than 53% from the previous year, marking it as one of the sharpest annual increases on record.

Multiple factors added to the erratic rise and uncertainty of natural gas prices last year. In early 2022, production hiccups caused by freeze-offs and a substantial draw from natural gas reserves nudged prices way up. Robust liquefied natural gas (LNG) exports to Europe and other regions, coupled with an increase in domestic demand caused by cold weather, stretched the price range even further.

In the spring of 2022, prices soared 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 toward storage. However, as the summer heat eased, prices climbed again, peaking in late August.

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

When Will the Cost of Home Heating Fuel Cool Down?

The variations in natural gas prices are indicative of the intricate interplay of factors influencing home heating costs. As we look forward to the rest of the 2023-24 heating season, the market’s past behavior offers insights into future price changes and the prospect of cost-saving opportunities.

As of late 2023, prices have fallen from their previous highs because of robust production and fairly mild temperatures. While demand continues to be steady, forecasters are predicting prices around $3.44/MMBtu this winter, offering some respite for homeowners as we move through the heating season.

Tips to Cut Your Heating Bill

No matter how you heat your home or what prices are like, you can take several practical steps to boost energy efficiency and reduce your heating expenses. Here are some strategies:

  • Seal drafty windows and doors with caulk and weatherstripping.
  • Use curtains to your advantage, throwing them open 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 stop 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 not home so you don’t pay extra to heat an empty house.
  • Wear warmer clothes indoors so you aren’t forced 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 comfortable at a lower temperature.

Keep Cozy and Warm 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 services can also help bring down home heating costs, which is good news for your pocketbook. With ACE-certified technicians at the helm, you can expect fast, lasting answers to all your comfort needs. The assurance of a 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 enjoyment of your residence. For more insights into heating prices in the U.S. or personalized methods to help reduce 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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