Heating Fuel Prices Continue to Rise; Increasing US Oil Supplies Compete with OPEC Production Cuts

January 12, 2017

Augusta, Maine – The Governor’s Energy Office (GEO) conducted its weekly heating fuel price survey on Monday, January 9, 2016, and found the current statewide average cash price for No. 2 heating oil was $2.27 per gallon, up another five cents (2.3%) over the last two weeks. The average statewide kerosene and propane prices have also increased over the same time period. The average statewide kerosene price increased five cents (1.8%) and is now at $2.80 per gallon; similarly, the average statewide propane price, for heating customers, is now $2.43 per gallon, four cents (1.7%) higher than two weeks ago.

The Organization of Petroleum Exporting Countries (OPEC) has begun implementing production cuts pledged last November; Saudi Arabia alone has reduced its production to its lowest in almost two years https://www.bloomberg.com/news/articles/2017-01-12/oil-holds-biggest-gain-in-6-weeks-amid-record-u-s-refinery-runs . However, the Energy Information Administration (EIA) reported yesterday that U.S. crude oil inventories have risen by over 4 million barrels, and domestic production is now at almost 9 million barrels a day. Over the longer term, it is uncertain at what level global production will settle, but for the present, crude prices, while fluctuating, continue to rise overall (see graph below).

Fluctuating Oil graph

This increase in crude oil prices has caused a similar increase in heating fuel prices in the state. Below is a chart illustrating the upward trajectory in heating oil prices over the last several months.

Residential Heating Oil Prices 2016-17 graph

The following table compares the prices between various heating fuels, and converts these prices to a common heating unit value (dollars per million Btu).

Comparison of Heating Fuel Prices per Million Btu*


Fuel Price (in dollars) Fuel Price (dollars per million Btu)
Cord Wood ($250/cord) $11.36
Natural Gas ($1.49/therm) $14.91
Wood Pellets ($261/ton) $15.82
Heating Oil ($2.27/gallon) $16.37
Kerosene ($2.80/gallon) $20.74
Propane ($2.43/gallon) $26.61
Electricity (baseboard) (15-18 cents/kwh) $43.94-$52.75

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 January 9, 2017


Heating Oil

Statewide

Southwest

Central

Eastern

Western

Northern

Average

2.27

2.23

2.31

2.28

2.22

2.39

High

2.55

2.40

2.55

2.46

2.40

2.45

Low

2.00

2.09

2.10

2.10

2.00

2.35

Kerosene

2.80

2.82

2.80

2.81

2.75

2.86

Propane

2.43

2.42

2.47

2.34

2.36

2.63

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 found was $2.55, and the lowest heating oil price found was $2.00. 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