When Can We Anticipate Home Heating Prices to Subside?
With winter weather settling in, homeowners in the U.S. are dealing with the problem of home heating costs. Recent years have seen a notable rise in energy prices, 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.
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 heats 5% of homes.
- Propane accounts for another 5%.
- Electricity warms 40% of U.S. homes. Fossil fuels remain the main source for generating electricity in spite of 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 vast majority of North American households. Supply and demand is the number one factor generating price fluctuations. An increase in supply—triggered by higher production and storage rates—typically lowers prices, while a spike in demand—triggered by severe weather, a flourishing 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, leading to a general price decline in all of 2018. But, 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 price since 2008, attaining an average of $6.45 per million British thermal units (MMBtu). This huge spike represented a major leap of more than 53% from the previous year, marking it as one of the sharpest annual increases on record.
Several factors contributed to the volatile rise and instability of natural gas prices last year. In early 2022, manufacturing hiccups caused by freeze-offs and a substantial draw from natural gas reserves nudged prices upward. Robust liquefied natural gas (LNG) exports to Europe and other regions, combined with an increase in domestic demand due to 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 stoppage at the Freeport LNG export terminal. This incident sharply cut U.S. LNG exports and redirected more natural gas toward storage. Unfortunately, as the summer heat faded, prices climbed yet again, hitting a high point in late August.
Shifting into the fall, a boost in natural gas production and higher-than-average injections into storage saw prices fall closer to the five-year average. But, as temperatures fell, the demand for heating caused prices to rise again.
When Will Prices Go 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 possibility of cost-saving opportunities.
As of late 2023, prices have come down from their previous highs thanks to robust production and reasonably mellow temperatures. Even though demand remains steady, forecasters suggest prices around $3.44/MMBtu this winter, giving some respite for property owners as we move through the heating season.
Tricks to Trim Your Heating Bill
Regardless of how you heat your home or what prices are like, you can take several easy steps to improve energy efficiency and reduce your heating bills. Here are a couple of ideas:
- 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 drawing them closed in the evenings to insulate your windows.
- Increase your attic insulation to prevent heat from rising out of your home.
- Install a smart thermostat that learns your behavior and saves you money.
- Reduce the temperature on your thermostat when you’re away to avoid overheating an empty house.
- Wear warmer clothes indoors so you don’t need to crank up the thermostat.
- Make an appointment for seasonal 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 cozy 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 happiness in your home. Our services can also help reduce home heating costs, which is good news for your bank account. With ACE-certified technicians at the helm, you can expect quick, lasting solutions 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 positive difference in your life and sense of comfort. For more insights into heating prices in the U.S. or personalized solutions to help lower 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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