Heating Oil Prices Fall Slightly as Mainers Plan for Upcoming Heating Season

August 25, 2016

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, August 22, 2016, and found the current statewide average cash price for No. 2 heating oil was $1.87 per gallon, two cents lower than a month ago. Average statewide kerosene prices follow the same trend; this week’s price was $2.41 per gallon, one cent lower than a few weeks ago. Propane prices have also declined over the last month, currently two cents lower at $2.15 per gallon.

The price rally observed in crude oil markets over the last several months has faltered, and prices have dipped since a June market high of over $51 a barrel. Brent crude oil, the European price benchmark, now stands at approximately $49/barrel, and West Texas Intermediate (WTI), the North American price benchmark, is now trading between $46 and $47 a barrel http://www.bloomberg.com/news/articles/2016-08-23/oil-futures-drop-as-u-s-crude-stockpiles-said-to-increase . Despite predictions of a decline in U.S. oil supplies, the Energy Information Administration reported last week that crude inventories actually rose by 2.5 million barrels, and now stand at the highest seasonal level since the mid-1980s. The global oil market continues to be in an excess supply situation, which results in downward pressure on prices. Heating oil prices, at least for the short term, reflect this downward price pressure, which is good news as Mainers begin planning their heating fuel purchases for the upcoming heating season.

As the graph below indicates, heating fuel prices have varied by approximately 30 cents a gallon over the entire 2015-16 time period, prices far less volatile than in years past.

Using this week’s average heating oil price ($1.87), and converting to a common heating unit value (million Btu), the price of fuel oil is $13.48. This compares with an equivalent heating unit value for natural gas of $11.70 (at $1.17/therm); propane, $23.54 (at $2.15/gallon); kerosene $17.85 (at $2.41/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 August 22, 2016


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

1.87

1.85

1.87

1.89

1.82

2.01

High

2.23

2.09

2.00

2.23

2.02

2.05

Low

1.69

1.69

1.75

1.70

1.70

1.95

Kerosene

2.41

2.49

2.35

2.37

2.37

2.47

Propane

2.15

2.17

205

2.13

2.17

2.28

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 ($2.23) was found in one region in the state, and the lowest heating oil price ($1.69) was also found in one region. 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.

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For Immediate Release

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