Homeowners can expect lower heating prices both short and long-term.
Homeowners who heat their houses with heating oil will see lower prices this winter and for the foreseeable future. Dramatic increases in production combined with ample and increasing inventories have driven the price of home heating oil down to levels not seen in years.
Prices have dropped across the entire heating oil marketing footprint. Heating oil closed on the NYMEX this past Friday, October 2 approximately 15% lower than the same time last year and almost half the price at the close of October 4, 2013—just two years ago.
According to the New York State Energy Research and Development Authority (NYSERDA), heating oil prices state-wide on September 14, 2015 are lower by $1.20 per gallon than the same time last year, a 31.9% reduction. New York is the largest heating oil consuming state.
Maine, the state with the highest percentage of oil heated homes, is showing an average state-wide price of $1.99 per gallon on September 21, the lowest heating season price recorded for the last ten years.
These reduced prices can add up quickly for homeowners. With an average annual heating oil usage of 750 to 800 gallons, a homeowner’s savings can approach $1,000 for the year.
Don Farrell,Executive Director of the Oilheat Manufactures Association said:
“This is really good news for Americans with oil fired heat and hot water. Not only do they have quality oil heat systems but now they can keep much more of their hard-earned dollars. Those with older systems might consider using the savings to upgrade to the newest, most efficient systems ensuring lower costs, safety and reliability into the future.”
Two prime movers forcing the drop in prices are increased production and full inventory stocks. With the United States now the world’s leading petroleum producer, production in 2014 showed a 34.6% increase over 2012 and the first seven month of 2015 show an increase of 11.5% over 2014. The combination of increased shipments from the Gulf Coast, higher refinery runs and imports have boosted East Coast distillate inventories to 5.4 million barrels above the five-year average for the week ending September 11, the highest since 2011. On September 18, the distillate inventory was at 59 million barrels.
Homeowners don’t have to rely solely on lower prices to reduce their heating costs. Proper maintenance and tune-ups of their heating system can save from 5 to 10% and upgrading an older heating system to a new high-efficiency system may save 30% and even more in some cases.
Heating oil, a type of distillate fuel oil, is used as a space heating or water heating fuel in about eight million U. S. households.