Heating Oil Continues its Slide as Worldwide Oil Glut Continues

November 12, 2014

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, November 10, 2014, and found the current statewide average cash price for No. 2 heating oil was $3.09 per gallon, dropping another 3 cents this week. The average statewide price for kerosene, $3.65 per gallon, is also three cents lower than last week. Propane prices continue to be stable; the statewide average price, $2.82 per gallon (for heating customers), is the same as last week. A year ago at this time, heating oil averaged $3.52 per gallon; kerosene, $3.93, and propane, $2.73.

The actions of OPEC (Organization of the Petroleum Exporting Countries) remain front and center in world energy markets. Monday, the Oil Minister of Kuwait, Ali al-Omair, said he did not expect OPEC would cut production anytime soon, and he expected the oil market would absorb the surplus http://www.bloomberg.com/news/2014-11-10/kuwait-oil-minister-sees-no-opec-output-cut-this-month.html . The largest OPEC producers are cutting prices, rather than reducing production, in an attempt to compete with ever increasing U.S. oil production.

Some energy analysts have observed that demand China rose in October, and speculated that this increase, if sustained, could help absorb surplus supplies http://www.businessweek.com/news/2014-11-10/crude-rises-for-second-day-on-signs-of-chinese-growth . For the near term, however, we are still in a surplus/declining price market.

Using this week’s average heating oil price ($3.09), and converting to a common heating unit value (million Btu), the price of fuel oil is $22.38. This compares with an equivalent heating unit value for natural gas of $18.82 (at $1.88/therm); propane, $30.88 (at $2.82/gallon); kerosene $27.04 (at $3.65/gallon); wood pellets, $15.33 (at $253/ton); cord wood, $11.36 (at $250/cord) and electricity, $46.89 (at 16 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 November 10, 2014


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

3.09

3.02

3.16

3.10

3.02

3.22

High

3.40

3.35

3.40

3.30

3.30

3.25

Low

2.74

2.74

2.90

2.80

2.78

3.18

Kerosene

3.65

3.71

3.63

3.62

3.62

3.62

Propane

2.82

2.86

2.75

2.76

2.99

2.72

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 ($3.40) was found in one region in the state, and the lowest heating oil price ($2.74) 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.

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For Immediate Release

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