Consumers are getting a break filling their gas tanks and heating their homes as lower demand and increased oil production have pushed down prices.

And although conflict has been raging for months in the oil-rich Middle East and skirmishes have threatened trade routes in the Red Sea, energy prices have not been affected. For now.

Home heating oil, still the most common choice for Maine homeowners, averaged $3.88 per gallon as of last week, according to the Governor’s Energy Office. That’s 60 cents less than the same time last year, a savings of $165 to fill a 275-gallon tank. The cost of propane is lower, too, although not nearly as much – $3.12 per gallon on average now compared to $3.25 last year, a savings of $26 to fill twin 100-gallon tanks.

The increasing number of residents who are using electric heat pumps to warm their homes – in whole or in part – will see savings in 2024 as well. The cost of energy supply and delivery for the average Central Maine Power customer (using 550 kilowatt-hours per month) dropped from $158.50 to $123.92, a savings of $34.48, according to the Maine Public Utilities Commission.

And gasoline prices are 66 cents less per gallon now on average than they were during the peak this summer ($3.19 versus $3.85), according to GasBuddy. That’s almost $8 less for each fill up on a 12-gallon tank.

John Lee, recreation assistant at the Westbrook Community Center, said he hasn’t noticed the savings yet. With two teenaged children, “anything extra goes to support their lifestyle,” he said.

He said his house in Windham is energy efficient and he typically fills the tank in midwinter and sometimes at the end of the season.

“Prices have gone down recently,” he said. “I don’t really complain too much.”

Kristie Charette, a Gorham homeowner, calculates that she’s saving about $50 a month on her heating oil bill this year versus last winter – $430, down from $480.

“It does help,” she said, although her electric bill is “still kind of costly” at $250 a month.

“Certainly, it’s not like it was two or three years ago,” Charette said.

GLOBAL UNREST COULD AFFECT MARKET

Falling energy costs are a bright note in an economy otherwise drawing complaints from consumers, according to polls. Americans are in a sour mood as they face prices that are still high after the hottest inflationary streak in 40 years, interest rates that will not likely begin to fall until spring at the earliest and housing prices that are beyond reach for millions of would-be homebuyers.

In December, about 80% of U.S. adults were unimpressed with the economy, according to Gallup. One-third rated conditions as only fair and 45% said the economy is poor. And just 3% of those surveyed described conditions as excellent and only 19% said the economy is in good shape. In addition, 68% of Americans say the economy is getting worse, 28% say it is improving and 4% believe it is staying the same.

Overall, the price of energy in the U.S. fell 2.3% in November, led by a 6% decline in gasoline, according to the most recent monthly data from the U.S. Bureau of Labor Statistics.

Falling energy prices are a textbook case of supply and demand, with abundant supplies and a brake on demand. U.S. oil production has reached a record 13 million barrels a day, according to the U.S. Energy Information Administration, up 8.5% from April 2020. While production is on a tear, higher demand than was anticipated when China ended its COVID-19 lockdown did not “materialize the way the oil market would have liked,” said Andrew Lipow, an energy analyst and president of Lipow Oil Associates in Houston. Oil prices did spike briefly after Hamas’ Oct. 7 attack on Israel, but oil supplies have not been disrupted, Lipow said.

Markets are concerned about hostilities in the Red Sea between the Iranian-backed Houthis and an international group led by the United States seeking to keep shipping lanes unimpeded, he said.

“The fear is that someone makes a mistake and shots are fired,” Lipow said.

Supplies would be disrupted in the Red Sea and Persian Gulf, followed by rising energy prices, he said.

Andrew Price, president and chief executive officer of Competitive Energy Services, a Portland consulting firm, said global politics haven’t slowed falling energy prices.

“Every week seems a new world,” he said. “It’s not thrown a wrench into the downward slide we’re seeing.”

COLDER WEATHER COULD AFFECT PRICES

New England, which typically pays high natural gas prices because the region’s pipelines have limited access to the rest of the U.S., is getting relief from lower natural gas prices, which has lowered electric rates. The price was $2.87 per million British thermal units in December, down from about $8 in June 2022, Competitive Energy Services said.

Falling natural gas prices were credited by state regulators who approved in November sharply lower 2024 electricity rates, by about $30 a month on average. Natural gas was used to generate 52% of the power produced in 2022 by New England’s power plants, according to ISO-New England, the region’s grid operator. Natural gas-fired power plants usually set the price of wholesale electricity in the region and as a result, average wholesale electricity prices are closely linked to natural gas prices.

The price of liquefied natural gas, another key source of energy for New England, jumped shortly after Russia’s invasion of Ukraine in February 2022 as European countries sought alternatives to Russian gas. Natural gas storage in Europe is now full, helping to push down prices on that front, too, Price said.

The falling price of gasoline will push average yearly spending per household to an estimated $2,407, down 2% from 2023, and more than 12% from 2022, according to GasBuddy.

Still, not everyone is feeling the savings.

Portland residents Max Thiele and Julia Schnee said they are paying more for electricity – which includes their heat – than last winter, although new rates in January could help.

“I’m blind to the costs of things these days because everything is so expensive,” said Schnee, 27.

The drop in gas prices has been more noticeable, but Thiele, an electrical engineer, said it’s been hard to cheer with higher costs elsewhere.

“The savings at the pump are offset by the expensive groceries,” he said. “Even though things have stabilized cost-wise, everything is expensive to live now … and people are getting pressed because wages aren’t keeping up with prices at all.”

Politics are a factor in the messaging over energy prices, particularly this year, when voters will decide who controls Congress and occupies the White House. President Biden has focused on gas prices over the last couple of years because it’s something that most Americans see regularly, Price said. The administration announced in November that it’s buying nearly 3 million barrels of oil to replenish the Strategic Petroleum Reserve the president tapped in 2022 to help keep prices down immediately after Russia’s invasion of Ukraine.

Dave Marcotte, chief operating officer at Lake Region Energy in Gorham, agreed that energy markets are a bit calmer now than in 2023. The war in Ukraine was “heightened last year” and the nation was exiting the “tailwind of COVID,” he said.

“Those are the major things right now,” he said. “Right now, I think it’s good for everybody.”

It has also been mild so far this winter, which has helped reduce demand. But spring is 11 weeks away, “and I think we could see things tighten up if we get cold weather,” Marcotte said.

Staff Writer Kay Neufeld contributed to this report.

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