As of February 28, 2005, the average residential heating oil price increased 8 cents from last week to $1.65 per gallon (see the table at the end of this report). Although wholesale prices have been increasing since the beginning of February, residential prices started increasing only last week. The margin between wholesale and residential prices was 26 cents at the beginning of February and has since fallen to 11 cents.
The graph below shows the spread in prices from month to month and from this year compared to previous years. The price on February 28 was 49 cents (43 percent) higher than the price was at this time last year.
The other states in the Midwest region had higher prices ranging from $1.73 to $1.90 per gallon resulting in a regional average of $1.85. States close in proximity to Nebraska, such as Iowa and Minnesota, had prices of $1.73 and $1.84, respectively.
Higher crude oil prices have pushed up prices in distillate markets while lower product inventories for distillate fuels have added further upward pressure.
For the week ending February 25, the Midwest distillate inventory level was skirting along the lower edge of the normal range.
Note: The annual report for the 2003-2004 winter season is available.
The Nebraska Energy Office has participated in the State Heating Oil and Propane Program for four years. During the heating season (October to March), the staff contact 15 companies each week who supply heating oil to Nebraska, collect Monday's retail price, and submit the data to the Energy Information Administration. The Energy Information Administration calculates the average price shown in the table below.
In the Midwest region, Nebraska's average residential heating oil price was the lowest price each week during the last three heating seasons. The Energy Information Administration theorized that this was due to minimal transportation costs. Another reason would be the number of participating states. Since state participation in the program is voluntary, heating oil prices were not surveyed in each state in the Midwest region. Kansas and Oklahoma might also have had low prices--possibly lower than Nebraska's because the two states are closer to heating oil sources.
During the off season (April through September), the Nebraska Energy Office staff continue to contact the same suppliers who were contacted during the heating season. Staff contact suppliers once a month instead of once a week since the price of heating oil is usually not as volatile during the off season. The Nebraska Energy Office staff calculate the average price, shown in the table below, from the suppliers' retail prices on the first Monday of the month.
State Heating Oil and Propane Program
The Energy Information Administration, the independent statistical and analytical agency within the U.S. Department of Energy, conducts the State Heating Oil and Propane Program from October to March--the heating season--each year. The Energy Information Administration collects prices for the program each week from participating states and calculates a state average price, a regional average price, and a national average price which can be seen in the report Residential Heating Oil Prices by Region and State.
For statistical purposes, the Energy Information Administration defines the Midwest region to include the states of Iowa, Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma, South Dakota, Tennessee, and Wisconsin.
The prices represent average residential home heating charge prices for home delivery of No. 2 heating oil, excluding taxes and cash discounts.