Heating oil prices neared another unprecedented threshold of $6 per gallon in southern Maine on Monday, despite the warmer temperatures and the ongoing release of U.S. oil reserves.

Bill Morrell, the owner of Atlantic Heating in Portland, said the price rose over 20 cents per gallon on Monday alone, and about $1.20 from last Tuesday. That’s a $330 increase in less than a week for the typical 275-gallon residential oil tank.

Morrell said it’s impossible to guarantee a price for customers – that the price they’re quoted when they order likely won’t be the price on the bill once it’s delivered, he said. And it could be higher or lower.

“The market is so volatile,” said Vic Kay, owner of Vic and Sons Fuel Co. in Westbrook, who has seen prices jump 60 to 70 cents in an hour.

Like many dealers, both Atlantic and Vic and Sons were charging $5.99 per gallon Monday and hoped they wouldn’t have to cross the $6 line for the first time.

“People aren’t going to buy oil when it’s $6 a gallon,” Kay said. “They’re going wait and wait and wait it out and see if prices come down.”

Dennis Sullivan, regional manager at Pit Stop Fuels in Gorham, which also was charging $5.99 per gallon, wasn’t sure if or when prices would start to come down, but said that as fuel distributors, it’s out of their hands.

“Everyone’s not happy,” he said. “There’s a lot of uncertainty.”

There are a number of factors at play that influence prices, but ultimately it boils down to supply and demand, said Charlie Summers, president and CEO of the Maine Energy Marketers Association.

Gas and oil prices fell during the height of pandemic because of low demand as lockdowns and travel restrictions kept people home. But as restrictions eased and people began to venture out again, demand started to rebound. Supply has not kept pace and prices started to climb.

Then in early March, following Russia’s invasion of Ukraine, the U.S. imposed strict sanctions on Russia, including a ban on oil imports.

Prior to the invasion on Feb. 24, most heating oil companies in southern Maine were charging below $4 a gallon, according to the Governor’s Energy Office. 

That was already a high price – at that point, the last time heating oil hit $3.50 was in 2014.

Russia is one of the biggest oil and gas producers in the world, and any disruptions stand to have a major impact on prices, although less than 10 percent of U.S. oil imports come from Russia.

Some signs have pointed to an impending drop in prices. The White House announced in March that it would release 180 million barrels from the reserves over the next six months, but that has yet to overcome the lack of supply from Russia.

Reduced demand from China under its latest round of COVID-19 lockdowns temporarily lowered prices, but reports of some of those restrictions loosening caused them to spike back up.

Morrell said that next month he’s supposed to start rolling out contracts for next winter, even though suppliers can’t say what the cost of oil will look like for next year. Right now, it’s looking like it’ll be close to $5, but if the war ends or coronavirus cases spike, the price could plummet again.

“I can’t recommend anybody buy oil at $5 a gallon for next year,” he said. “It’s just as frustrating for us as it is for our customers, if not more so.”

Maine is particularly vulnerable to fluctuations in the cost of oil.

Heating oil and kerosene still warm six out of 10 Maine homes, the largest share in the country, according to the energy office. And many of those homes are hemorrhaging heat. Between half and two-thirds of the state’s 550,000 homes were built before 1960, long before modern energy-efficiency standards were established.

But there is some relief on the horizon for Mainers.

Summers expects that prices will start to fall again as we get further into the warmer months and demand for heating oil lessens.

At the very least, “We won’t see the price spikes that we’ve seen thus far,” he said.

Additionally, thanks to the budget surplus, an estimated 858,000 Mainers can expect to receive $850 relief checks, meant help households cover unexpected increases in expenses, like home heating oil.

The checks are expected to be sent beginning in June.

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