Heating Oil Prices Fall Slightly as Crude Oil Market Rally Falters

July 20, 2016

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, July 20, 2016, and found the current statewide average cash price for No. 2 heating oil was $1.91 per gallon, two cents lower than a month ago. Average statewide kerosene prices follow the same trend; this week’s price was $2.44 per gallon, one cent lower than a few weeks ago. Propane prices have also declined over the last month, currently three cents lower at $2.16 per gallon.

The price rally observed in crude oil markets over the last several months has faltered, and prices have dipped 10 percent since June http://www.bloomberg.com/news/articles/2016-07-17/oil-producers-prepare-for-second-half-slump-as-rally-sputters .

As the graph below illustrates, U.S. crude oil inventories, while lower than they were a few months ago, remain significantly above the five year range.

In addition, gasoline inventories are at an all-time seasonal high¹. So, while crude inventories are not at the record high levels observed a year ago, supplies of refined products have increased, which also has a dampening effect on prices of all products. Even an attempted coup in Turkey has not created enough uncertainty about disruptions in the market to increase crude prices. Consequently, heating oil prices have stopped declining, and in fact, have dropped slightly since June.

Using this week’s average heating oil price ($1.91), and converting to a common heating unit value (million Btu), the price of fuel oil is $13.77. This compares with an equivalent heating unit value for natural gas of $11.82 (at $1.18/therm); propane, $23.65 (at $2.16/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 money over the course of a heating season. The type of heating system, as well as its efficiency, is also an important factor in determining final costs. 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 July 18, 2016


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.91

1.87

1.91

1.92

1.86

2.06

High

2.19

2.09

2.05

2.19

2.02

2.10

Low

1.70

1.70

1.75

1.70

1.70

2.00

Kerosene

2.44

2.50

2.39

2.40

2.39

2.52

Propane

2.16

2.20

2.08

2.12

2.18

2.29

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 ($2.19) was found in one region in the state, and the lowest heating oil price ($1.70) was found in three regions. Also, the statewide average price for propane is based on consumption 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.


¹ Energy Information Administration, July 2016

Download Release (PDF)

For Immediate Release

Contact:
Lisa Smith
(207) 624-7445
lisa.j.smith@maine.gov