When Are Home Heating Prices Expected to Go Down?

With winter weather settling in, homeowners in the U.S. are experiencing the pain of home heating costs. Recent years have seen a remarkable rise in energy costs, leaving many in search of answers and relief. Understand what has an impact on home heating prices, the recent trends we’ve seen and strategies to keep your utility bills in check.

Different Kinds 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 heats 5% of homes.
  • Propane fuels another 5%.
  • Electricity warms 40% of U.S. homes. Fossil fuels remain the primary source for creating electricity even with the increase in renewable energy sources like wind and solar. 

What Factors Impact the Price of Fossil Fuels?

Based on 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 causing price fluctuations. An increase in supply—triggered by higher production and storage rates—typically lowers prices, while a surge in demand—triggered by harsh 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. However, demand has increased significantly recently across all sectors, causing natural gas prices to reach heights not seen in roughly a decade.

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

Numerous 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 significant draw from natural gas reserves nudged prices way up. Robust liquefied natural gas (LNG) exports to Europe and other regions, paired with a spike in domestic demand because of cold weather, stretched the price range even further.

In the spring of 2022, prices soared past $9/MMBtu, only to tumble by 40% following the fire and subsequent closure of the Freeport LNG export terminal. This incident sharply cut U.S. LNG exports and redirected more natural gas to storage. However, as the summer heat faded, prices climbed once more, reaching a peak in late August.

Going 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. However, as temperatures dropped, the demand for heating caused prices to ascend one more time.

When Will the Cost of Home Heating Fuel Calm Down?

The changes in natural gas prices are indicative of the complex 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 changes and the potential for cost-saving measures.

As of late 2023, prices have come down from their previous highs because of robust production and relatively mild temperatures. Although demand is still steady, forecasters are predicting prices around $3.44/MMBtu this winter, offering some respite for individuals 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 improve energy efficiency and reduce your heating bills. 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 closing them at night to insulate your windows.
  • Increase your attic insulation to keep heat from rising out of your home.
  • Buy a smart thermostat that learns your routines and saves you money.
  • Dial down the temperature on your thermostat when you’re not home to avoid overheating an empty house.
  • Put on warmer clothes inside your residence so you do not have to crank up the thermostat.
  • Plan annual furnace maintenance to keep your heating system in top shape.
  • Set up 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 well-being. Our work can also help bring down home heating costs, which is excellent news for your bank account. With ACE-certified technicians at the helm, you can expect quick, durable solutions to all your comfort needs. Our 100% satisfaction guarantee means that if you’re not totally happy with our services, we promise to 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 positive difference in your life and enjoyment in your home. For more insights into heating prices in the U.S. or personalized methods 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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