More of the Same: Heating Oil Prices Continue their Downward Slide

August 27, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, August 24, 2015, and found the current statewide average cash price for No. 2 heating oil was $2.08 per gallon, down another 9 cents from two weeks ago. Average kerosene and propane prices also followed the same trend; the average statewide kerosene price this week was $2.67 per gallon (nine cents lower), and the average statewide propane price for heating customers was $2.21, another four cents lower than two weeks ago. Below is a graph illustrating the year-long decline in Maine’s heating oil prices.

Heating oil prices continue their slide because global crude oil prices keep falling. West Texas Intermediate (WTI) crude oil, the North American benchmark price, is trading below $40 per barrel, and Brent crude (the European benchmark price) is just slightly higher, at just over $43 per barrel. According to the federal Energy Information Administration (EIA), U.S. crude oil inventories remain extremely high, at levels not seen (in August) for the last 80 years, and refineries are operating at near maximum capacity. The world is awash with oil, and global demand is not absorbing this excess production. Energy Office Director Patrick Woodcock sees current oil prices as an opportunity for Mainers. “Heating oil prices this low are freeing up dollars that Maine households can use to invest in energy efficiency and heating system upgrades. When prices rise again, those investments will pay dividends. Now is the time to plan ahead.” Using this week’s average heating oil price ($2.08), and converting to a common heating unit value (million Btu), the price of fuel oil is $15.00. This compares with an equivalent heating unit value for natural gas of $12.50 (at $1.25/therm); propane, $24.20 (at $2.21/gallon); kerosene $19.78 (at $2.67/gallon); wood pellets, $15.39 (at $254/ton); cord wood, $12.95 (at $285/cord) and electricity (electric baseboard), $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 24, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.08

2.01

2.13

2.09

2.03

2.28

High

2.39

2.39

2.27

2.31

2.38

2.35

Low

1.74

1.74

2.00

1.74

1.74

2.20

Kerosene

2.67

2.73

2.62

2.59

2.70

2.68

Propane

2.21

2.23

2.05

2.23

2.21

2.40

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 ($2.39) was found in one region in the state, and the lowest heating oil price ($1.74) 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