Heating Oil Prices Continue to Tumble in Middle of Heating Season

December 29, 2015

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, December 28, 2015, and found the current statewide average cash price for No. 2 heating oil was $1.83 per gallon, down nine cents over the last couple of weeks. The average kerosene price declined six cents during the same time, now $2.44 per gallon, while the average statewide propane price increased a penny to $2.21 a gallon.
This unprecedented fall in heating oil prices is due to continued declines in global crude oil prices. This month, the Organization of Petroleum Exporting Countries (OPEC) decided to eliminate production caps, and the US Congress voted to lift the decades-old ban on domestic crude oil exports. So, already low prices have tumbled even further; today, both Brent and West Texas Intermediate crude are selling in the $36 per barrel range. Until now, North American shale oil producers have continued to produce at record levels through innovations in drilling techniques. However, forecasters expect US oil production to plummet in 2016 if prices continue in the $35 range. The US Energy Information Administration has amended its earlier forecast, and is now predicting an even more sizeable drop in US oil production in 2016.

Production declines this significant are likely to have an effect on crude prices in the future, but for the present, heating oil prices will continue to be quite low.

Using this week’s average heating oil price ($1.83), and converting to a common heating unit value (million Btu), the price of fuel oil is $13.19. This compares with an equivalent heating unit value for natural gas of $15.72 (at $1.57/therm); propane, $24.31 (at $2.22/gallon); kerosene $18.07 (at $2.44/gallon); wood pellets, $15.58 (at $258/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 28, 2015


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.83

1.77

1.91

1.82

1.78

1.99

High

2.10

2.10

2.10

2.00

2.03

2.10

Low

1.46

1.46

1.60

1.50

1.46

1.87

Kerosene

2.44

2.56

2.41

2.34

2.42

2.38

Propane

2.22

2.23

2.10

2.17

2.33

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 ($2.10) was found in three regions in the state, and the lowest heating oil price ($1.46) was found in two 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