Statewide Heating Oil Prices Lower as Crude Oil Prices Continue Falling

December 8, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, December 7, 2015, and found the current statewide average cash price for No. 2 heating oil was $1.97 per gallon, down another cent from last week. The average kerosene price also dropped a penny to $2.56 per gallon, while the average statewide propane price remained the same at $2.20 a gallon.

Despite calls from some OPEC members (Organization of Petroleum Exporting Countries) to cut back oil production, during its Friday meeting the group abandoned any attempt at controlling prices through production quotas, sending global crude oil prices to a six year low http://www.bloomberg.com/news/articles/2015-12-06/oil-extends-losses-below-40-as-opec-abandons-production-target .

WTI Crude plunges to 6-year low

Energy experts see many similarities between current market conditions and the last time OPEC ‘lost control’ of prices, back in 1997-1999, when oil dropped to $10 a barrel http://www.bloomberg.com/news/articles/2015-12-07/opec-s-oil-market-disarray-looks-like-1990s-slump-all-over-again . However, oil markets emerged from this crisis, prices recovered, and continued rising to a high of almost $150 a barrel. It is unclear whether history will repeat itself, but for the present, all market indicators are for prices to stay low.

Saudi Arabia is continuing to produce above its target; Iran will be increasing its production as global economic sanctions are lifted; and worldwide demand is off, raising global inventories to over 3 billion barrels. According to the Energy Information Administration, U.S. oil inventories are at their highest levels for this time of year since 1930. Couple those stockpiles with an El Nino weather pattern (which weather forecasters say means a warmer-than-normal winter for the heating oil dependent Northeastern US), and the oil glut isn’t going to disappear any time soon. Mainers can expect a prolonged period of very low heating fuel prices.

Using this week’s average heating oil price ($1.97), and converting to a common heating unit value (million Btu), the price of fuel oil is $14.20. This compares with an equivalent heating unit value for natural gas of $15.72 (at $1.57/therm); propane, $24.09 (at $2.20/gallon); kerosene $18.96 (at $2.56/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 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 are much more efficient than baseboard electric heat, so total energy costs are lower than 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 December 8, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.97

1.91

2.02

1.98

1.90

2.17

High

2.40

2.19

2.25

2.40

2.10

2.25

Low

1.60

1.60

1.70

1.66

1.66

2.15

Kerosene

2.56

2.68

2.50

2.50

2.50

2.55

Propane

2.20

2.20

2.08

2.18

2.31

2.34

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 ($2.40) was found in one region in the state, as was the lowest heating oil price ($1.60). 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