Heating Oil Prices Decline Further as Global Oil Production and Inventories Remain High

August 11, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, August 10, 2015, and found the current statewide average cash price for No. 2 heating oil was $2.17 per gallon, down 16 cents over the last three weeks. Average kerosene and propane prices have declined as well; the average statewide kerosene price this week was $2.76 per gallon (fourteen cents lower), and the average statewide propane price for heating customers was $2.25, another seven cents lower than the third week in July.

Crude oil prices have declined approximately $15 a barrel in just the last month. In mid-July, prices were in the $58 (West Texas Intermediate, or WTI) to $63 (Brent) range; on Monday, August 10th, both the European and North American benchmark prices were under $50 per barrel (Brent just under $50; WTI was under $45). Price gains made since January have been wiped out over the last several weeks. U.S. stockpiles are 100 million barrels above the seasonal five year high level; OPEC members continue pumping at record levels; and, U.S. refineries are also operating at record levels http://www.bloomberg.com/news/articles/2015-08-09/oil-declines-a-fourth-day-as-u-s-drillers-add-rigs-to-fields; http://www.eia.gov/petroleum/weekly/archive/2015/150805/includes/analysis_print.cfm

These sustained high worldwide production levels, in the context of flat demand, means stockpiles continue to rise – and the global oil ‘glut’ continues. This is good news for Mainers heating with any distillate fuel – oil, kerosene, or propane. All prices are lower than they’ve been in many years. Propane prices are now lower than any time since the office began tracking prices in 2010; kerosene is lower than any time since September of 2009; and heating oil is less expensive than any time since March of 2009, during an economic recession.

Using this week’s average heating oil price ($2.17), and converting to a common heating unit value (million Btu), the price of fuel oil is $15.65. This compares with an equivalent heating unit value for natural gas of $12.50 (at $1.25/therm); propane, $24.64 (at $2.25/gallon); kerosene $20.44 (at $2.76/gallon); wood pellets, $15.39 (at $254/ton); cord wood, $12.95 (at $285/cord) and electricity (typical resistance), $38.10 to $55.69 (at 13-19 cents per kwh).

However, fuel-only prices are only part of the calculation when determining which fuel will save you more this heating season. The type of heating system, as well as its efficiency, needs to be considered. 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. Efficiency Maine also has a calculator on its website that can help consumers evaluate their heating options http://www.efficiencymaine.com/at-home/home-energy-savings-program/heating-cost-comparison/

As of August 10, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.17

2.10

2.27

2.18

2.11

2.35

High

2.54

2.50

2.50

2.54

2.50

2.40

Low

1.76

1.76

2.05

1.76

1.76

2.20

Kerosene

2.76

2.83

2.73

2.70

2.76

2.75

Propane

2.25

2.25

2.08

2.25

2.30

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 ($2.54) was found in one region in the state, and the lowest heating oil price ($1.76) was recorded in three regions. 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