On November 17, 2008, the average residential heating oil price had fallen nearly 12 cents from last week to $2.40 per gallon (see the table at the end of this report). The graph below shows the spread in prices from month to month and from this year compared to previous years. This week's average price was 26 cents (or 20 percent) lower than the price at this time last year.
Other states in the Midwest Region had higher prices ranging from $2.42 to $2.74 with the region averaging $2.56 per gallon. States adjacent to Nebraska, such as Iowa, Minnesota, and Wisconsin, had prices of $2.44, $2.74, and $2.58, respectively.
Nebraska's average wholesale price fell nearly 19 cents this week, while the rack-to-retail margin increased to 23 cents.
For the week ending November 14, the Midwest heating oil inventory level was in the lower half of the normal range for this time of year at 2.3 million barrels.
Notes: The annual report for the 2007-2008 winter season is available. An archive houses annual reports from previous years.
A general rule of thumb: A dollar increase in the West Texas Intermediate (WTI) crude oil price per barrel will result in a 2.5-cent increase in the price of heating oil per gallon. Likewise, a dollar decrease in the WTI crude oil price per barrel will result in a 2.5-cent decrease in the price of heating oil per gallon.
The Nebraska Energy Office has participated in the State Heating Oil and Propane Program for eight winter seasons. During the heating season (October to March), the staff contact 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.
At times, Nebraska's average residential heating oil price has been the lowest price in the Midwest Region. 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.