Heating Fuel Prices Remain Steady into November

November 10, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, November 9, 2015, and found the current statewide average cash price for No. 2 heating oil was $2.05 per gallon, up one cent over the last two weeks. Average kerosene and propane prices followed similar trends; the average statewide kerosene price this week was $2.61 per gallon (up one cent also), and the average statewide propane price for heating customers was $2.18 per gallon, unchanged from two weeks ago. All three statewide average prices have remained essentially the same since the heating season began October 1.

Today, the Economist provided a succinct analysis of the outlook on global oil prices. Prices are currently being largely determined by market forces (i.e., supply and demand), and not by the international oil cartel, Organization of Petroleum Exporting Countries (OPEC). The reasons? 1) There is unlikely to be an OPEC production cut in the near future() ; 2) While there is geopolitical instability production has not been curtailed in key producing nations; and 3) American shale oil producers, despite global crude prices below $50 a barrel, continue to be surprisingly resilient. Basic economic laws of supply and demand are, for the first time in decades, largely determining oil prices. High inventories, coupled with firm but flat worldwide demand, have caused prices to fall dramatically. These low prices, in turn, are causing American production to decline, a trend expected to continue until mid-2016. Maine households have been benefiting from these lower prices. If prices continue to stay in the $2.00 per gallon range this winter, Mainers will spend approximately $320 million less to stay warm this winter than they did in 2013-14 under the same conditions.

Using this week’s average heating oil price ($2.05), and converting to a common heating unit value (million Btu), the price of fuel oil is $14.78. This compares with an equivalent heating unit value for natural gas of $14.94 (at $1.49/therm); propane, $23.87 (at $2.18/gallon); kerosene $19.33 (at $2.61/gallon); wood pellets, $15.39 (at $254/ton); cord wood, $11.36 (at $250/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 factored into the estimate. 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 November 9, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.05

2.00

2.08

2.08

1.97

2.17

High

2.37

2.30

2.20

2.37

2.24

2.20

Low

1.73

1.73

1.90

1.80

1.80

2.15

Kerosene

2.61

2.75

2.53

2.58

2.54

2.58

Propane

2.18

2.20

2.09

2.16

2.20

2.33

The price for heating oil is a statewide average; 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 ($2.37) was found in one region in the state, and the lowest heating oil price ($1.73) 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