Heating Oil Prices Continue to Decline as US Oil Production Increases

May 8, 2013

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, May 6, 2013, and found the current statewide average cash price for No. 2 heating oil to be $3.44 per gallon, now 40 cents per gallon lower than the season’s peak price recorded in mid-February. The average kerosene price has decreased similarly; this week’s average price of $3.91 per gallon is also 40 cents lower than mid-February. Propane prices have held relatively steady in comparison, decreasing only 4 cents in the same time period; this week’s statewide average price, in amounts used for heating, is $2.73 per gallon.

Aside from reduced demand for heating oil this time of year, more crude oil is being produced domestically than any time since early 1992. Domestic oil production has increased 57,000 barrels per day, due to horizontal drilling and hydraulic fracturing practices http://www.bloomberg.com/news/2013-05-07/wti-crude-little-changed-after-first-drop-in-four-days-on-supply.html . US crude oil stockpiles have increased to their highest level in 82 years, according to Bloomberg News. More production and larger stockpiles, coupled with more refining capacity in operation and decreased global demand, translate into lower prices for consumers.

Using this week’s average heating oil price ($3.44) and converting to a common heating unit value (million Btu), the price of fuel oil is $24.80. This compares with an equivalent heating unit value for natural gas of $17.00 (at $1.70/therm); propane, $29.89 (at $2.73/gallon); wood pellets, $14.55 (at $240/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. 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 May 6, 2013


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.47

3.37

3.52

3.44

3.42

3.56

High

3.60

3.55

3.60

3.55

3.58

3.60

Low

3.18

3.18

3.30

3.19

3.19

3.40

Kerosene

3.91

3.85

4.06

3.86

3.85

3.96

Propane

2.73

2.59

2.82

2.64

2.73

3.14

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 lowest heating oil price of $3.18/$3.19 was found in three regions of the state, and the highest of $3.60 was found in two regions in 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 generally 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