When Can We Anticipate Home Heating Prices to Subside?
With winter weather settling in, homeowners in the U.S. are facing the problem of home heating costs. Recent years have seen a remarkable increase in energy costs, leaving many in search of answers and relief. Learn what impacts home heating prices, the recent trends we’ve seen and ways to keep your utility bills in check.
Different Kinds of Home Heating Fuel
Many fuels are used to keep homes warm and cozy in the United States:
- Natural gas heats 48% of American homes.
- Heating oil serves 5% of homes.
- Propane fuels another 5%.
- Electricity warms 40% of U.S. homes. Fossil fuels remain the most used source for making electricity even with the renewed focus on renewable energy sources like wind and solar.
What Factors Impact the Cost of Fossil Fuels?
Based on the above information, it’s apparent that fossil fuels heat a great majority of North American households. Supply and demand is the most significant factor causing price fluctuations. An increase in supply—triggered by more production and storage rates—usually lowers prices, while a surge in demand—brought about by severe weather, a flourishing economy and rising rates for alternative fuels—can cause prices to soar.
How Much Have Natural Gas Prices Increased?
Domestic natural gas production outpaced consumption starting in 2017, causing a general price decline through 2018. Unfortunately, demand has soared 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 hit its highest peak since 2008, reaching an average of $6.45 per million British thermal units (MMBtu). This huge spike represented a significant leap of greater than 53% from the previous year, marking it as one of the biggest annual increases on record.
Many factors led to the volatile rise and lack of stability of natural gas prices last year. In early 2022, manufacturing 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 regions, combined with a surge in domestic demand due to 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 shutdown at the Freeport LNG export terminal. This incident considerably cut U.S. LNG exports and redirected more natural gas into storage. But, as the summer heat ebbed, prices climbed yet again, reaching a peak in late August.
Moving into the fall, an uptick in natural gas production and higher-than-average injections into storage saw prices fall closer to the five-year average. Yet, as temperatures decreased, the demand for heating caused prices to rise one more time.
When Will Prices Cool Down?
The variations in natural gas prices are indicative of the intricate interplay of factors influencing home heating fuel rates. 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 potential for cost-saving opportunities.
As of late 2023, prices have fallen from their previous highs due to robust production and fairly mild temperatures. Although demand is still steady, forecasters suggest prices around $3.44/MMBtu this winter, offering some respite for property owners as we move through the heating season.
Ways to Reduce Your Heating Bill
It doesn’t matter how you heat your home or what prices are like, you can take several easy steps to increase energy efficiency and lower your heating costs. Here are a couple of strategies:
- 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 drawing them closed in the evenings to insulate your windows.
- Add more attic insulation to prevent heat from rising out of your home.
- Install a smart thermostat that learns your routines and saves you money.
- Lower the temperature on your thermostat when you’re out to avoid overheating an empty house.
- Don warmer clothes indoors so you aren’t forced to crank up the thermostat.
- Make an appointment for yearly furnace maintenance to keep your heating system in top shape.
- Use a whole-house humidifier. Moist air feels warmer than dry air, so you feel more comfy 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 lower home heating costs, which is good news for your pocketbook. 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 completely happy with our services, you know we will make things right.
As a company that prides itself on innovation, customer engagement and community support, 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 solutions 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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