Heating Oil Prices Continue to Increase Despite $50 Domestic Crude Oil

March 4, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, March 2, 2015, and found the current statewide average cash price for No. 2 heating oil was $2.86 per gallon, up an additional 8 cents from last week. The average statewide price for kerosene also increased over the last two weeks, and is now $3.37 per gallon, six cents higher. Average propane prices remained steady, at $2.71 a gallon (for heating customers). Prices have increased sharply over the last month – average heating oil prices have climbed over 30 cents, and average kerosene prices 26 cents. Heating oil prices tend to lag behind changes in crude oil markets by 2-3 weeks, so these increases may reflect recent increased volatility in both domestic and global markets. Some refineries are undergoing maintenance; switching to summer gasoline production; and, hampered by labor strikes, all of which affect production output of refined products, such as heating oil. In addition, February’s low temperatures broke records in some locations in Maine http://www.pressherald.com/2015/03/01/february-was-coldest-on-record-in-portland/ and in other northeast states, which also drove up local demand. However, U.S. crude stockpiles are still the highest in decades http://www.eia.gov/forecasts/steo/uncertainty/ , and global supplies are also overflowing, so energy market experts do not anticipate significant price increases for a while. Heating fuel prices are still far lower than they were at this time last year; during this week in 2014, heating oil averaged $3.86 per gallon; kerosene, $4.32, and propane, $3.51, but Mainers are paying a little more for heating fuels than they were a month ago.

Using this week’s average heating oil price ($2.86), and converting to a common heating unit value (million Btu), the price of fuel oil is $20.62. This compares with an equivalent heating unit value for natural gas of $19.27 (at $1.927/therm); propane, $29.67 (at $2.71/gallon); kerosene $24.96 (at $3.37/gallon); wood pellets, $15.33 (at $253/ton); cord wood, $12.95 (at $285/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 March 2, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.86

2.83

2.87

2.89

2.80

2.96

High

3.21

3.09

3.21

3.15

2.96

3.21

Low

2.65

2.65

2.70

2.70

2.70

2.90

Kerosene

3.37

3.42

3.31

3.39

3.36

3.31

Propane

2.71

2.69

2.75

2.68

2.73

2.73

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 ($3.21) was found in two regions in the state, and the lowest heating oil price ($2.65) was 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