Slight Recovery of Crude Oil Prices Sustained for Another Week

March 22, 2016

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, March, 2016, and found the current statewide average cash price for No. 2 heating oil was $1.73 per gallon, up a penny since last week. This week’s price, while up slightly for the second week in a row, is still 28 cents per gallon less expensive than it was at the beginning of the heating season. Average statewide kerosene prices went up a penny, to $2.27 a gallon, while average propane prices were up two cents, and now average $2.24 per gallon (for residential heating customers).

Both major crude oil price indicators, West Texas Intermediate (WTI, the North American benchmark) and Brent (the European benchmark), have risen from lows of under $30 per barrel in January to just over $40 this week. However, as the graph below indicates, US crude oil inventories are still at record highs, and this trend is not expected to change dramatically in 2016.

These high oil inventories contribute to rather flat price trends over the next year or so. In the graph below, the Energy Information Administration (EIA) forecasts little change in oil prices this year, and only slight price gains well into 2017. It would appear that, overall, lower heating fuel prices are here to stay for a while longer.

Using this week’s average heating oil price ($1.73), and converting to a common heating unit value (million Btu), the price of fuel oil is $12.47. This compares with an equivalent heating unit value for natural gas of $13.90 (at $1.39/therm); propane, $24.53 (at $2.24/gallon); kerosene $16.81 (at $2.27/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 explore these fuel options further, as well as compare efficiencies of heating systems most closely matching their own system. 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 March 21, 2016

Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.73

1.71

1.73

1.76

1.68

1.83

High

2.08

1.99

1.90

2.08

1.93

1.85

Low

1.47

1.50

1.50

1.50

1.47

1.80

Kerosene

2.27

2.37

2.20

2.24

2.25

2.26

Propane

2.24

2.24

2.14

2.20

2.24

2.38

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 ($2.08) was found in one region in the state, and the lowest heating oil price ($1.47) 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