When Will Home Heating Costs Decline?

With winter weather hitting hard, homeowners in the U.S. are experiencing the pain of home heating costs. Recent years have seen a noteworthy increase in energy rates, leaving many searching for answers and relief. Learn what affects 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 for home heating 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 remain the main source for making electricity in spite of the renewed focus on renewable energy sources like wind and solar. 

What Are the Key Influences on the Price of Fossil Fuels?

Based on the above information, it’s clear 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 higher production and storage rates—generally lowers prices, while an increase in demand—triggered by extreme weather, a booming 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, resulting in a general price decline throughout 2018. But, demand has surged recently across all sectors, causing natural gas prices to attain heights not seen in roughly a decade.

In 2022, the average wholesale cost of U.S. natural gas reached its highest peak since 2008, reaching an average of $6.45 per million British thermal units (MMBtu). This massive increase represented a significant leap of over 53% from the previous year, marking it as one of the biggest annual increases in history.

Multiple 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 substantial draw from natural gas reserves nudged prices upward. Robust liquefied natural gas (LNG) exports to Europe and other countries, coupled with an increase in domestic demand due to cold weather, stretched the price range even further.

In the spring of 2022, prices roared past $9/MMBtu, only to fall 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 to storage. But, as the summer heat faded, prices climbed yet again, hitting a high point in late August.

Moving into the fall, a boost in natural gas production and higher-than-average injections into storage saw prices retreat closer to the five-year average. However, as temperatures dropped, the demand for heating caused prices to rise again.

When Will the Cost of Home Heating Fuel Cool Down?

The variations in natural gas prices underscore the complex 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 trends and the prospect of cost-saving options.

As of late 2023, prices have fallen from their previous highs thanks to robust production and reasonably moderate 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.

Tips to Trim Your Heating Bill

Regardless of how you heat your home or what prices are like, you can take several easy steps to increase energy efficiency and reduce your heating expenses. 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 pulling them back over the windows each night to insulate your windows.
  • Increase your attic insulation to stop heat from rising out of your home.
  • Install a smart thermostat that learns your behavior and saves you money.
  • Lower the temperature on your thermostat when you’re not home so you aren’t spending money to heat an empty house.
  • Don warmer clothes inside your residence so you don’t need to crank up the thermostat.
  • Make an appointment for annual furnace maintenance to keep your heating system in good working order.
  • Install 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 of greater importance to the Service Experts Heating, Air Conditioning & Plumbing team than your comfort and safety. Our services can also help reduce home heating costs, which is good news for your wallet. With ACE-certified technicians at the helm, you can expect quick, durable remedies to all your comfort needs. The assurance of a 100% satisfaction guarantee means that if you’re not completely 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 significant difference in your life and enjoyment of your residence. For more insights into heating prices in the U.S. or personalized solutions 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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