Heating Oil Prices Lower Again this Week, Despite Slight Increase in Crude Oil

March 28, 2013

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, March 25, 2013, and found the current statewide average cash price for No. 2 heating oil to be $3.66 per gallon, down three cents from last week’s price survey, and 19 cents lower than this time last year. The average kerosene price also fell three cents, to $4.11 per gallon. Propane prices remained the same as last week, averaging $2.75 per gallon.

Several events this week may have had an impact on the price of heating fuels. According to the Energy Information Administration (EIA), U.S. refineries operated at 83.5 percent of capacity in the seven days ending March 13, up 2.5 percentage points from the prior week. Units are often idled for maintenance in late winter as attention shifts away from heating oil and before gasoline consumption rises. Decreased capacity a few weeks earlier contributed to the price spikes observed in January. http://www.bloomberg.com/news/2013-03-26/wti-crude-advances-to-five-week-high-on-u-s-durable-goods.html

However, upward price pressure on oil is present this week as well. The financial bailout deal reached this week between Cyprus, the European Union, European Central Bank and the International Monetary Fund means a brighter economic picture for Europe, which translates into higher prices. http://www.bloomberg.com/news/print/2013-03-25/wti-oil-rises-to-one-month-high-on-cyprus.html

Good economic news in the US also contributed to a higher West Texas Intermediate (WTI) price this week. The US Commerce Department reported that US orders for durable goods rose more than forecasted, and energy markets responded accordingly. http://www.bloomberg.com/news/2013-03-25/wti-oil-trades-near-five-week-high-u-s-stockpiles-seen-rising.html The price spread between Brent crude and WTI crude declined to its lowest level since July.

Using this week’s average heating oil price ($3.66) and converting to a common heating unit value (million Btu), the price of fuel oil is $26.39. This compares with an equivalent heating unit value for natural gas of $17.00 (at $1.70/therm); propane, $30.11 (at $2.75/gallon); wood pellets, $14.79 (at $244/ton); cord wood, $10.50 (at $210/cord) and electricity, $43.96 (at 15 cents per kwh). The electricity cost is for traditional baseboard heat. Electric heat pumps, a recent technological advancement, are much more efficient, so total energy costs are lower than oil, kerosene, or propane.

The GEO has a calculator on its web site that allows consumers to estimate home heating costs and price impacts of various energy sources. See http://www.maine.gov/energy/index.html . Efficiency Maine Trust also has an interesting chart homeowners can use to compare costs of specific heating options http://www.efficiencymaine.com/pace/compare-heating-options

As of March 25, 2013


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.66

3.57

3.71

3.69

3.64

3.81

High

3.90

3.85

3.85

3.90

3.75

3.85

Low

3.30

3.30

3.50

3.34

3.47

3.68

Kerosene

4.11

4.04

4.20

4.12

4.04

4.21

  Propane

2.75

 

 

 

 

 

It is important to note that the price for heating oil is a statewide average, and that prices in a given geographic region of the state may be considerably higher or lower than this average. This week, within the Energy Office sample, the both the lowest heating oil price of $3.30, and the highest of $3.90, were each found in only one region of the state. Also, the statewide average price for propane is based on a use of at least 900 gallons a year. Households using propane just for cooking or hot water may pay a higher per gallon price. The table above provides current Maine cash prices in dollars rounded to the nearest penny.

Efficiency Maine links Maine homeowners and businesses with qualified, certified contractors who provide access to energy improvement options. For program details call 866-376-2463 or visit www.efficiencymaine.com.

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For Immediate Release

Contact:
Lisa Smith
(207) 624-7445
lisa.j.smith@maine.gov