Heating Oil Prices Creeping Up as Global Oil Prices Recover

May 17, 2016

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, May 16, 2016, and found the current statewide average cash price for No. 2 heating oil was $1.82 per gallon, which is nine cents higher than a month ago. Average statewide kerosene prices have also increased; this week’s price was $2.34 per gallon, six cents higher. Propane prices have remained steady over the last month, now $2.21 per gallon. Consistent prices for propane may be due to the way propane is purchased and delivered by dealers. Most dealers sign delivery contracts in spring for the upcoming season. This year, our mild winter weather means some dealers have not depleted the volumes they purchased last spring, so there has been no upward pressure on prices.

Heating oil and kerosene prices, however, have been rising with the price of crude oil. After plummeting to twelve year lows of less than $30/barrel in February, crude oil prices have been slowly rising; this week’s North American (WTI) and European (Brent) crude oil prices were in the $48-49/barrel range. The worldwide inventory surplus, which has caused downward pressure on prices over the last several months, is beginning to ease. According to commodity experts, improving economics in countries such as India; supply disruptions in Nigeria; and, falling U.S. oil production have all contributed to the increase in prices http://www.bloomberg.com/news/articles/2016-05-15/oil-trades-above-46-as-china-refines-record-u-s-rigs-drop . This rise in prices may not indicate a longer term upward trend, however. In its May short term Energy Outlook, the U.S. Energy Information Administration (EIA) described a volatile market, with high uncertainty regarding future prices http://www.eia.gov/forecasts/steo/

Using this week’s average heating oil price ($1.82), and converting to a common heating unit value (million Btu), the price of fuel oil is $13.12. This compares with an equivalent heating unit value for natural gas of $12.20 (at $1.22/therm); propane, $24.42 (at $2.21/gallon); kerosene $17.33 (at $2.34/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 May 16, 2016


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.83

1.79

1.84

1.87

1.76

1.97

High

2.17

2.09

2.05

2.17

2.00

2.00

Low

1.50

1.50

1.65

1.60

1.50

1.90

Kerosene

2.34

2.42

2.29

2.25

2.33

2.40

Propane

2.22

2.24

2.13

2.19

2.22

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 ($2.17) was found in one region in the state, and the lowest heating oil price ($1.50) 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