Crude Oil Prices Remain Stable and State Heating Fuel Prices Follow Suit as Cold Winter Continues

February 11, 2014

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, February 10, 2014, and found the current statewide average cash price for No. 2 heating oil was $3.88 per gallon, down one cent from last week. The average statewide price for kerosene is up one cent, to $4.30 per gallon. This week’s average statewide price for propane (for heating customers) increased by 4 cents, to $3.51 per gallon. Heating fuel prices have risen 35 cents (heating oil), 36 cents (k-1), and 86 cents (propane) per gallon since the heating season began in October. Last year at this time, heating oil averaged $3.83 per gallon; kerosene, $4.30, and propane, $2.74.

A recent Wall Street Journal article discussed how in spite of increased demand and decreased stocks, West Texas Intermediate crude oil prices remained stable for the week at around $100 per barrel. They attributed this phenomenon to increases in production of oil by non-OPEC countries, most notably, the United States. This could have a positive impact on those who use petroleum products, such as heating oil and propane, to heat their homes. The Wall Street Journal projects that in the upcoming year “rising non-OPEC supply growth should pressure oil markets.” They said that this means the price per barrel should stay within “the range of $90 to $115 a barrel.”

This stabilization of crude oil prices could have a similar, stabilizing effect on petroleum-based heating fuel prices. The prices of heating oil and propane tend to follow the crude oil prices. This can be seen in the graphs below, which have trend lines that are very similar. Morgan Stanley projects crude oil to average $103 a barrel for the year, slightly higher than where it stands now.



Using this week’s average heating oil price ($3.88) and converting to a common heating unit value (million Btu), the price of fuel oil is $27.98. This compares with an equivalent heating unit value for natural gas of $15.50 (at $1.55/therm); propane, $38.43 (at $3.51/gallon); kerosene $31.85 (at $4.30/gallon); wood pellets, $14.67 (at $242/ton); cord wood, $11.36 (at $250/cord) and electricity, $43.96 (at 15 cents per kwh). These fuel-only prices do not take into account the type of heating system, nor its efficiency. For example, the electricity cost is for traditional baseboard heat. Other electric heating technologies, such as heat pumps and electric thermal storage (ETS), may offer consumers energy savings. Cold climate heat pumps, a recent technological advancement, are much more efficient than baseboard electric heat, so total energy costs are lower than many other types of heating fuels. ETS offers savings by utilizing off-peak electric rates, available in many areas of the state.

The Energy Office has a calculator on its web site that allows consumers to obtain more detailed estimates of home heating costs, and the price impacts of various types of fuel, heating systems and heating appliances. Heating costs vary considerably from home to home. The home heating calculator can assist homeowners in finding the best heating option for their home, location, lifestyle, and budget http://www.maine.gov/energy/index.html

As of February 10, 2014


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.88

3.87

3.90

3.89

3.86

3.91

High

4.29

4.29

4.15

4.03

4.00

3.97

Low

3.60

3.60

3.80

3.70

3.70

3.90

Kerosene

4.30

4.31

4.31

4.30

4.27

4.30

Propane

3.51

3.60

3.57

3.44

3.32

3.63

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 highest heating oil price ($4.29) was found in one region in the state, and the lowest heating oil price ($3.60) was also recorded in one region. 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 Trust 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.

Download Release (PDF)

For Immediate Release

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