State of Nebraska Heating Oil and Propane Program (SHOPP)

SHOPP 2024/2025 Highlights

The month of October was 40 percent warmer than normal October winter weather.

Residential propane prices averaged two percent higher than the last heating season (2023/2024).

Propane stocks were at 375,000 barrels at the beginning of the heating season (October 2024). The 375,000-barrel level was in the center of the five-year range.

Propane stocks ended the season (March 2025) in the lower half of the five-year range.

Residential heating oil prices averaged 16 percent lower than the last winter season (2023/2024).

Distillate fuel stocks started the heating season (October 2024) at 525,000 barrels, which was in the lower half of the five-year range.

Distillate fuel stocks ended the season (March 2025) in the center of the five-year range.
 

Winter Recap

The winter of 2024/2025 in Nebraska was 6.5 percent warmer than normal, indicating fewer cold days than usual. Weather is always the wild card in the winter season. (Figure 1--right-click and choose "Open image in new tab".) Along with weather, other variables that affected prices and supply in the U.S. included OPEC+ issues, geopolitical incidents, refinery matters, and union strikes. There are more variables but not all are mentioned in this report.

In October 2024, the dockworkers' union (the International Longshoremen's Association) suspended a three-day strike until January 15, 2025. The workers went back to work immediately. The surprise end to the strike might have caught railroads with cars, engines, and crews out of position, but it was thought that railroads were likely to work quickly to fix that. Supply chain experts said consumers wouldn't see an immediate impact from the strike because most retailers stocked up on goods, moving ahead shipments of holiday gift items.

In October 2024, a rise in oil prices intensified after President Biden suggested that U.S. officials were considering whether to support an Israeli strike on Iranian oil facilities, a move that would have pushed gasoline prices higher just weeks before the presidential election. A calm 2024 for petroleum gave way to bets that a spike in energy prices would follow. Benchmark U.S. crude jumped 5.1 percent, to $73.71, its largest one-day gain since the early stages of Israel's war on Hamas a year ago. The tremors weighed down U.S. stock indexes and left investors scrambling to understand the potential fallout of a broader war.

Also in October 2024, Saudi Arabia's oil minister warned of oil prices as low as $50 per barrel as OPEC+ members openly disregarded production curbs. OPEC+ wasn't sticking to agreed-upon production limits. The kingdom called out members for overproducing, in what was seen as a veiled threat of a price war. Saudi Arabia was willing to launch the price war to keep its market share. With this threat, OPEC+ producers agreed to output cuts.

At the end of October 2024, crude oil prices fell after Israel's strike on Iran steered clear of Iran's oil and nuclear facilities. Oil futures fell toward some of their lowest prices in years after Israel's strikes on Iran avoided energy facilities and reduced the fears of a wider war that could have disrupted global supplies.

Figure 11 (right-click and choose "Open image in new tab") shows the five-year range, the five-year average, and last year's distillate inventory levels for Nebraska. Inventories were in the lower half of the five-year range at the beginning and at the end of the winter season (October and March). Likewise, inventories were below the five-year average and last year's levels in these two months. The inventory levels stayed above the five-year range for November, December, and January. In February, the inventory level was at the upper boundary. The inventory levels were above the five-year average and last year's levels in these months with the exception of January. In January, the level was equal to January 2024's level.

Throughout the winter heating season, the weekly average retail prices of home heating oil in Nebraska were in the center of the five-year range, much lower than last year's prices, and equivalent to the five-year averages.

Nebraska’s propane inventory levels were relatively volatile this winter. Levels started the season in the upper half of the five-year range similar to the last four years. Inventories increased to the upper boundary in December, dropped to the lower boundary in January, were in the center in February, and fell slightly to the lower half of the five-year range in March.

The prices of propane were flat and equivalent to the five-year averages and last year's prices throughout the heating season. The prices were in the center of the five-year range for all six months.