Nebraska's average propane prices were fairly volatile throughout the 2007/2008 heating season in comparison to previous years when propane prices were very stable. The average home heating charge price for delivery of consumer grade propane, excluding taxes and cash discounts, in Nebraska for the 2007/2008 heating season was $1.88 per gallon.
Heating oil prices began the 2007/2008 heating season 57 cents per gallon higher than the previous heating season yet relatively comparable to two years ago. Heating oil prices were volatile during most of the 2007/2008 heating season ending at $3.55 per gallon.
Factors that impact prices each season include: national and state inventory and import levels, refinery downtime, prices of crude oil and natural gas, the weather, the economy, and the political situation. Each of these factors can lead to increased demand or lower-than-normal supplies during the winter heating season. Factors that impacted prices during the 2007/2008 heating season included:
High crude oil prices;
High natural gas prices;
Oil refinery shutdowns due to planned maintenance and unexpected hazards;
The 108,000 b/d oil refinery operated by Coffeyville Resources Refining & Marketing,
LLC in Coffeyville, Kansas, was shut down July 1, 2007, in the wake of intense flooding
by the Verdigris River June 30-July 1. The Coffeyville refinery is one of the key
contributors to the Group 3 spot market. On August 17, 2007, Coffeyville Resources
restarted most of the operating units;
In June, 2007, the oil battle between ExxonMobil, ConocoPhillips, and Venezuela lent
support to crude values. Both ExxonMobil and ConocoPhillips opted to pull out of the
Venezuelan fields rather than cede more control to PDVSA. Venezuela's state-run oil
company halted sales of crude to ExxonMobil Corp. over a legal tangle in February, 2008;
Beginning June 1, 2007, refiners were required by an EPA rule to begin production of
non-road, locomotive, and marine diesel fuel that meets a maximum sulfur level of
500 ppm. The rule did not include diesel fuel for home heating. As a result, stock builds
of heating oil were expected to be rare, as refiners concentrated on making low sulfur or
ultra-low sulfur diesel;
Discussions were held throughout the build season regarding a looming supply crisis in
heating oil for the 2007/2008 winter season;
Normal regional distillate inventory levels at the beginning of the heating season,
average levels throughout the season, and above-average levels at the end of the season.
One percent of the state’s households (7,009) use heating oil to heat their homes;
The regional propane storage goal of 25 million barrels was not attained during the
traditional build season (April through September). Nine percent of Nebraska
households (63,080) use propane to heat their homes;
A below-average national propane stockbuild from April to September;
Ongoing war with Iraq;
Mild hurricane season with only one hurricane, Humberto, making landfall; and
Three percent colder-than-normal heating season temperatures.