Summer Heating Fuel Prices: Strong Dollar and Potential for Additional Oil Supplies Lowering Prices

July 21, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, July 20, 2015, and found the current statewide average cash price for No. 2 heating oil was $2.33 per gallon, down twelve cents over the last three weeks. Average kerosene and propane prices have declined as well; the average statewide kerosene price this week was $2.90 per gallon (ten cents lower), and the average statewide propane price for heating customers was $2.32, also ten cents lower than the first of the month.

Recently, crude oil prices were hovering between $58 (WTI) and $63 (Brent) per barrel, which is approximately $13-18 per barrel higher than the historic low prices seen in January. The US economy has outperformed European and developing countries, which has led to a stronger dollar and leads to lower priced oil. In addition, there is potential of additional supplies from Iran and US production has been resilient. Additional production in an already oversupplied market will put additional downward pressure on prices http://www.bloomberg.com/news/articles/2015-07-14/what-iran-s-nuclear-deal-means-for-the-global-crude-oil-market . Although this is not good news for domestic oil producers, any sustained downward pressure on oil prices will benefit Maine families heating with oil.

Using this week’s average heating oil price ($2.33), and converting to a common heating unit value (million Btu), the price of fuel oil is $16.80. This compares with an equivalent heating unit value for natural gas of $13.58 (at $1.358/therm); propane, $25.40 (at $2.32/gallon); kerosene $21.48 (at $2.90/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 July 20, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.33

2.25

2.39

2.36

2.27

2.56

High

2.65

2.59

2.60

2.59

2.58

2.65

Low

1.90

1.90

2.20

1.94

1.94

2.44

Kerosene

2.90

2.97

2.86

2.83

2.89

2.96

Propane

2.32

2.35

2.13

2.33

2.36

2.49

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 ($2.65) was found in one region in the state, and the lowest heating oil price ($1.90) 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