World Crude Oil Prices Continue to Plummet; Heating Oil Prices Fall Even Lower

January 13, 2016

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, January 11, 2015, and found the current statewide average cash price for No. 2 heating oil was $1.81 per gallon, down an additional two cents over the last couple of weeks. The average kerosene price declined two cents as well, now $2.42 per gallon, while the average statewide propane price increased a penny to $2.22 a gallon.

Worldwide crude oil prices have continued their downward spiral, falling to approximately $30 a barrel, prices not seen for over a decade http://www.bloomberg.com/news/articles/2016-01-12/wti-oil-falls-below-30-for-first-time-since-dec-2003 . And, in forecasts published by the US Energy Information Administration today, prices are not expected to rise significantly until well into 2017 (see graph below).

Why? Because global oil production has continued to exceed consumption since 2014, as illustrated below. Consumption, worldwide, is not projected to align with production until well into 2016.

Crude oil prices in the $30-per-barrel range means heating oil prices will continue to be low for the remainder of the heating season. The image below illustrates that much, but not all, of the price of a gallon of heating oil is due to the prevailing price of crude oil. The remaining costs are refining, distribution, and marketing.

Using this week’s average heating oil price ($1.81), and converting to a common heating unit value (million Btu), the price of fuel oil is $13.05. This compares with an equivalent heating unit value for natural gas of $15.80 (at $1.58/therm); propane, $24.31 (at $2.22/gallon); kerosene $17.93 (at $2.42/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 January 11, 2016


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.81

1.76

1.86

1.80

1.76

1.96

High

2.17

2.00

2.05

2.17

2.03

2.00

Low

1.48

1.48

1.60

1.55

1.55

1.90

Kerosene

2.42

2.53

2.39

2.32

2.42

2.38

Propane

2.22

2.22

2.11

2.17

2.34

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 ($2.17) was found in one region in the state, and the lowest heating oil price ($1.48) was also found 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