The months of summer comprise the building season for propane and heating oil. The summer following the 2013/2014 heating season was a building season of phenomenal proportions for propane. All three storage tiers were nearly, if not totally, full by the beginning of the 2014/2015 heating season. The three storage tiers are primary storage - propane suppliers/companies, secondary storage - propane marketers/dealers, and tertiary storage - consumers. No one was willing to risk being unprepared if Nebraska had another winter like 2013/2014.
THROUGHOUT THE 2014/2015 HEATING SEASON, propane stocks in the Midwest were either above or in the upper third of the 5–year range, which is a very good supply. Heating oil stocks in the Midwest were below the 5–year range during October to December, 2014. As of January 2015 and throughout the rest of the heating season, Midwest heating oil stocks were either above or in the upper third of the 5–year range. Although heating oil started the heating season with a low level of supply, heating oil stocks finished the season at good levels.
Halfway through 2013, petrochemical companies substituted propane with ethane due to the high price of propane. This continued into 2014 as the price spread between propane and ethane widened. This, in turn, put downward pressure on propane demand.
Through September, 2014, propane prices at the Conway, Kansas, distribution center were higher than prices at Mont Belvieu, Texas, which created an incentive for shipping propane north into the Midwest markets. Following the dropping crude oil price, heating oil prices were an average of 23 percent lower than the last heating season.
Better-prepared customers, milder weather, and a decrease in the amount of propane used to dry crops the past fall helped Nebraska avoid a repeat of 2014’s propane crisis.