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October 3, 2018

Heating oil prices spike, topping $3 in northern Maine

The statewide average cash price for No. 2 heating oil is $2.88 per gallon, according to the weekly heating fuel price survey conducted by the Governor's Energy Office on Monday. Northern Maine had the highest cash price of the five regions surveyed, reporting an average cash price of $3.04 per gallon.

The Governor's Energy Office said the $2.88 per gallon average price for heating oil was 14 cents higher per gallon than a month ago.

For other heating fuels the office reported:

  • Average statewide kerosene price is up 11 cents, to $3.45 per gallon.
  • Statewide average propane price has also climbed, up 9 cents over the last four weeks, to $2.77 per gallon (for heating customers).

Heating fuel prices have increased 3% to 4% since June, the office reported.

According to Bloomberg, several factors are the cause of this upward spike in prices. Exports of Iranian oil have dropped significantly in advance of the second round of U.S. economic sanctions, scheduled to take effect Nov. 4, Bloomberg reported, adding that economic challenges in Venezuela have resulted in significant drops in production there.

Bloomberg added that, to date, there haven't been significant Increases in North American shale oil production. Production in other OPEC member countries has increased slightly, but not yet sufficient to offset the loss of Iranian and Venezuelan production.

The Governor's Energy Office said the longer term outlook for global production and prices (including heating fuel prices) is uncertain. Some energy analysts are predicting even higher prices, while others believe additional production from both OPEC and non-OPEC members, will come on-line, thus balancing the market.

This week, within the Governor's Energy Office sample, the highest heating oil price found was $3.10 per gallon and the lowest heating oil price found was $2.50. Also, the statewide average price for propane is based on consumption of at least 900 gallons a year.

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