State of Nebraska

Heating Oil and Propane Program

2022/2023 Winter Heating Season

Nebraska Department of Environment and Energy

245 Fallbrook Blvd

P.O. Box 98922|Lincoln, NE 68509

Phone (402) 471–2186|Fax (402) 471–2909

Winter Recap

Weather is always the wild card in the winter season. This winter, weather was not a big factor compared to other winters when weather included more winter storms and cold snaps. The winter of 2022/2023 had more heating degree days than average indicating slightly colder than normal (2 percent) weather in Nebraska.

In October 2022, OPEC+ announced a production cut of 2 million barrels per day. By the end of October, the Energy Information Administration (EIA) estimated U.S. distillate inventories were 104 million barrels, the lowest end-of-October level since 1951. Nebraska doesn’t have data from 1951, but distillate inventories were 467 thousand barrels which was the lowest end–of–October level in the last decade.

Nebraska’s distillate inventories were below the five–year range only during the month of October. Higher refinery runs and less consumption contributed to Nebraska distillate fuel inventories increasing during October, November, and December of 2022. U.S. distillate inventories were well below the five–year average through all of 2022 in all major trading regions globally, a situation largely related to reduced distillate exports from Russia and trade dislocations following Russia’s full–scale invasion of Ukraine in February 2022. In 2023, widespread refinery strikes in France further reduced global diesel supplies. Seasonal increases in demand and refinery closures affected inventories and contributed to price increases.

At the start of the winter heating season, the retail price of home heating oil in the United States and Nebraska climbed rapidly, establishing new records toward the beginning of November. The prices were higher than last year due to high wholesale prices and low imports. In December, crude oil prices rose above $100 per barrel after Russia’s further invasion into Ukraine. This didn’t impact Nebraska’s retail heating oil prices even though Nebraska’s wholesale heating oil prices increased. Retailers absorbed the wholesale increase rather than pass any of it along to their customers.

Nebraska’s stocks of propane started the season above the five-year range and steadily decreased through the winter staying in the middle of the five–year range with an inconsistent drop in December due to increased heating degree days.

The price of propane was flat and above the five–year (2018–2022) average throughout the heating season. This was probably due to Nebraska’s stock levels and the winter weather. In December, when stock levels decreased below the five–year range due to an increase in heating degree days, there was no change in the price of propane. In March 2023, U.S. propane exports reached a record high. There was no impact on Nebraska prices or stocks. Prices were still flat, and stocks were in the center of the five–year range. This was due to the winter season coming to an end.

Both retail propane prices and retail heating oil prices in the Midwest and Nebraska ended the winter heating season lower than in the last week of last year’s heating season.

Residential Propane

The average home heating charge price for delivery of consumer–grade propane, excluding taxes and cash discounts, in Nebraska for the 2022/2023 heating season was $1.87 per gallon. This was a 21–cent (or 11–percent) drop from last season's average price at $2.08. Propane prices are subject to both the volatility of the oil markets and natural gas production.

Figure 2 shows Nebraska's average retail propane price each week during the 2022/2023 heating season.
Fig 2: Average Retail Propane Price
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For the 2022/2023 season, the average retail price of propane started at $1.88 per gallon. The average price was stable throughout the season. The fourth week of March, or the end of the season, had a price of $1.85 per gallon. This price was three cents lower than the price at the beginning of the heating season. Prices reported on the survey each week were dependent upon when a retailer bought a load of propane from their supplier. After buying a load of propane, the retail price would reflect the wholesale price paid. (See Figure 2.)

Figure 3 compares Nebraska's five–year retail propane price range, the five–year average retail propane prices, last season's retail propane prices, and this season's retail propane prices.
Fig 3: Retail Propane Price Comparisons
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The average propane price began the 2022/2023 heating season at $1.88, 15 cents (or seven percent) lower than the price of $2.03 at the beginning of the last heating season. As shown in Figure 3, the average propane prices in the 2022/2023 season were stable in the upper half of the five–year range, above the five–year average, but below last year's prices.

Figure 4 compares Nebraska's five–year wholesale propane price range, the five–year average wholesale propane prices, last season's wholesale propane prices, and this season's wholesale propane prices.
Fig 4: Wholesale Propane Price Comparison
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The average wholesale propane price began the 2022/2023 heating season at 99 cents, which was 60 cents lower than the price of $1.59 at the beginning of the last heating season. As Figure 4 shows, average wholesale propane prices were relatively stable while staying in the center of the five–year range, above and below the five–year average, and below last year's prices throughout the season. The wholesale price ended the season at 82 cents which was 17 cents below the price at the beginning of the season (99 cents).

Figure 5 compares Nebraska's average retail propane prices versus the wholesale propane prices for the 2022/2023 heating season.
Fig 5: Avg Retail vs. Wholesale Propane Price Comparison
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A comparison of average retail propane prices versus average wholesale propane prices in Figure 5 shows that retail prices during the 2022/2023 heating season ranged from a low of $1.85 to a high of $1.90, while wholesale prices ranged from a low of 80 cents to a high of $1.03. Both retail prices and wholesale prices were stable.

Figure 6 compares Nebraska's five–year retail propane stocks or inventory levels, the five–year average retail propane stocks, last season's retail propane stocks, and this season's retail propane stocks.
Fig 6: Retail Propane Stock Comparisons
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According to EIA, Nebraska's total inventory of propane was 385,000 barrels at the beginning of the heating season in October 2022, which was 22,000 barrels (six percent) above propane stocks one year earlier. Stocks started the season right above the five–year range, dropped way below the five–year range in December (due to increased heating degree days), but moved back into the five–year range where stock levels stayed through March. Stocks ended the heating season at 111,000 barrels. (Figure 6)

Residential Heating Oil

The average home heating charge price for delivery of No. 2 heating oil, excluding taxes and cash discounts, in Nebraska for the 2022/2023 heating season was $3.76 per gallon. The season's average price jumped 69 cents (or 23 percent) from last season's average of $3.07. Heating oil prices are highly dependent on crude oil market movements.

Figure 7 shows Nebraska's average retail heating oil price each week during the 2022/2023 heating season.
Fig 7: Average Retail Heating Oil Price
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Figure 7 shows that the average retail price of heating oil started the 2022/2023 season at $3.89 per gallon, $1.06 (37 percent) higher than the price of $2.83 at the beginning of the last heating season. Average heating oil prices jumped through October but decreased through November. The prices were relatively stable after the second week of December until the end of March. The ending price of $3.26 per gallon was 63 cents (16 percent) lower than the price at the beginning of the season ($3.89).

Figure 8 compares Nebraska's five–year retail heating oil price range, the five–year average retail heating oil prices, last season's retail heating oil prices, and this season's retail heating oil prices.
Fig 8: Retail Heating Oil Price Comparisons
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As Figure 8 shows, the average price of heating oil had a considerable jump from last year's price and the five–year average at the beginning of the heating season. The average price started far above the five–year range and continued to rise above the five–year range until the last week of February. From then on, the prices slowly decreased to end the season near the center of the five–year range.

The average wholesale heating oil price began the 2022/2023 heating season at $3.55 per gallon, $1.00 (39 percent) higher than the price of $2.55 at the beginning of the last heating season. Average wholesale heating oil prices were volatile this winter.

Figure 9 compares Nebraska's five–year wholesale heating oil price range, the five–year average wholesale heating oil prices, last season's wholesale heating oil prices, and this season's wholesale heating oil prices.
Fig 9: Wholesale Retail Heating Oil Price Comparisons
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As Figure 9 shows, the average wholesale price of heating oil had a considerable jump from last year's price and the five–year average at the beginning of the heating season. The average wholesale price started above the five–year range and jumped 81 cents the first week. In the weeks afterward, the prices slowly decreased until the second week of December. From there, the prices were volatile even while entering the five–year range in the third week of February. Winter ended with the prices near the center of the five–year range.

Figure 10 compares Nebraska's average retail heating oil prices versus the wholesale heating oil prices for the 20222023 heating season.
Fig 10: Retail vs. Wholesale Heating Oil Price Comparison
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A comparison of retail heating oil prices and wholesale heating oil prices in Figure 10 shows that, during the 2022/2023 heating season, retail prices ranged from a low of $3.26 to a high of $4.66, while wholesale prices ranged from a low of $2.74 to a high of $4.36.

Figure 11 compares Nebraska's five–year retail distillate fuel oil stocks or inventory levels, the five–year average retail distillate fuel oil stocks, last season's retail distillate fuel oil stocks, and this season's retail distillate fuel oil stocks.
Fig 11: Distillate Stocks
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According to EIA, Nebraska's total inventory of distillate fuel was 467,000 barrels at the beginning of the heating season in October 2022, which was 350,000 barrels (43 percent) below distillate fuel stocks one year earlier. Stocks started the season below the five–year range but steadily increased to the upper half of the five–year range by December. From then, stocks dropped to the bottom of the five–year range. The winter ended with stocks in the lower half of the five–year range at 608,000 barrels. (Figure 11)

Heating Degree Days

Figure 1 compares this heating season's heating degree days to the heating degree day normals in Nebraska.
Fig 1: Heating Degree Days
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The 2022/2023 winter heating season, as a whole, saw colder–than–normal winter weather. The traditional heating season for both heating oil and propane is October through March. For this period, Nebraska normally has 5520 heating degree days. From October through March during the 2022/2023 winter season, Nebraska had 5647 heating degree days which indicates that the weather was 2 percent colder than normal. A degree day is a 1 degree Fahrenheit difference between 65 degrees Fahrenheit and the average outdoor air temperature on a given day. The more extreme the temperature, the higher the number of degree days. The higher the number of heating degree days, the colder the weather, and the more days that Nebraskans had to heat their homes.

Looking at individual months, it was warmer–than–normal winter weather in October and January, normal winter weather in February, and colder–than–normal winter weather in November, December, and March as reflected by Figure 1. The bars in Figure 1 represent the heating degree day results of normal winter weather for each month in Nebraska. The line represents the heating degree day results of the actual weather that the 2022/2023 winter season experienced.

Purpose of State Heating Oil and Propane Program Survey

The Nebraska Department of Environment and Energy (NDEE) collects residential prices of No. 2 heating oil and consumer–grade propane during the heating season (October to March) for the State Heating Oil and Propane Program (SHOPP). It is the only U.S. Department of Energy (USDOE) Energy Information Administration (EIA) survey that collects propane prices. The data are used by NDEE to monitor the prices of propane and heating oil during the winter season to maintain awareness of any price or supply irregularities that may be developing. The data is also used by policymakers, industry analysts, and consumers.

Slide Deck 2023 SHOPP Chart Gallery

* Click/tap the first chart to begin reviewing the deck

* Click/tap the right-side of a chart to move forward

* Click/tap the left-side to move backward

* Click/tap the 'X' (or anywhere outside the chart) to close

Figure 1 compares this heating season's heating degree days to the heating degree day normals in Nebraska. Figure 2 shows Nebraska's average retail propane price each week during the 2022/2023 heating season.
Figure 3 compares Nebraska's five–year retail propane price range, the five–year average retail propane prices, last season's retail propane prices, and this season's retail propane prices. Figure 4 compares Nebraska's five–year wholesale propane price range, the five–year average wholesale propane prices, last season's wholesale propane prices, and this season's wholesale propane prices.
Figure 5 compares Nebraska's average retail propane prices versus the wholesale propane prices for the 2021/2023 heating season. Figure 6 compares Nebraska's five–year retail propane stocks or inventory levels, the five–year average retail propane stocks, last season's retail propane stocks, and this season's retail propane stocks in Nebraska.
Figure 7 shows Nebraska's average retail heating oil price each week during the 2022/2023 heating season. Figure 8 compares Nebraska's five–year retail heating oil price range, the five–year average retail heating oil prices, last season's retail heating oil prices, and this season's retail heating oil prices.
Figure 9 compares Nebraska's five–year wholesale heating oil price range, the five–year average wholesale heating oil prices, last season's wholesale heating oil prices, and this season's wholesale heating oil prices. Figure 10 compares Nebraska's average retail heating oil prices versus the wholesale heating oil prices for the 2022/2023 heating season.
Figure 11 compares Nebraska's five–year retail distillate fuel oil stocks or inventory levels, the five–year average retail distillate fuel oil stocks, last season's retail distillate fuel oil stocks, and this season's retail distillate fuel oil stocks. Antique heating oil trucks

Sources: Today in Energy, U.S. Energy Information Administration, Washington, DC.

Short–Term Energy Outlook, U.S. Energy Information Administration, Washington, DC.

2022/23 Winter Propane Market Update, U.S. Energy Information Administration, Washington, DC.

This Week in Petroleum, U.S. Energy Information Administration, Washington, DC.

Average Residential Propane Prices in Nebraska and Average Residential Heating Oil Prices in Nebraska. Nebraska Department of Environment and Energy, Lincoln, NE.

This report was completed September 2023.