Heating oil prices are at their lowest point since 2009, and typical heating oil customers are likely to save nearly $1,000 this year compared to last year, according to a recent article in the Boston Globe.
"Heating oil in Massachusetts tumbled to an average price of $2.49 a gallon in late August, down more than 30 percent from the same period a year earlier and selling in some parts of the state at less than $2 a gallon, according to the state Department of Energy Resources," The Globe wrote. "If the current price patterns hold - and many analysts think they will, given the glut of crude oil on global markets - a typical household using 800 gallons of oil during a winter could save nearly $1,000."
Alan Clayton-Matthews, a Northeastern University economist, told The Globe that the drop in heating oil prices may provide a small boost to the state's economy - assuming prices hold through the winter - as people spend more on products and services. "For most households, 800 to a thousand bucks is a big deal," he said. "It will free up money for households to spend on other things."
Jim Phaneuf, who lives and runs an insurance agency in Belchertown in Western Massachusetts, told the Globe that oil heat is the only option at his home and business. If prices remain low through the winter, he said, he could save hundreds of dollars at his home and as much as $2,000 at his business.
Petroleum prices are falling because of record U.S. oil production and weakening global demand, the result of slowing economic growth in other countries, particularly China, according to the article. The price of gasoline in Massachusetts averaged $2.23 a gallon on September 14, down $1.20 from a year ago, according to AAA Northeast, a nonprofit auto services organization.
"The decline is welcomed by heating oil suppliers, who in recent years have lost thousands of customers switching to natural gas because of lower costs," the article states. "It's been fantastic," Ted Noonan, owner and president of Springfield-based Noonan Energy Corp. told The Globe. "Our customers are really happy. You don't have as many people thinking of converting to natural gas."
"Michael Ferrante, president of the Massachusetts Energy Marketers Association, which represents hundreds of heating oil suppliers, said members are confident prices will remain relatively low this winter," the article states. "He noted inventories of heating oil, purchased at recent low prices, are now 21 percent higher than they were a year ago, providing a financial buffer should wholesale fuel prices unexpectedly shoot upward this winter."
To read the Boston Globe article, click here.