Last week the U.S. Department of Health and Human Services released $450 million in low-income home energy assistance funds. This comes just after a Department of Commerce ruling doubled the amount a household can receive from $500.00 to $1,000.00. These measures are designed to ease the impacts of what is amounting to a home heat shortage.
This week, national stocks of propane fell another 832,000 barrels -- that's 43.8% below the same time last year. Meanwhile, 62% of the nation is covered in snow compared to 42% at this time last year. Hours of service waivers are in place at a regional level now, not just as individual states, with the East coast extending delivery waivers out until March 1.
High natural gas prices lend hope to increased production, but in the short-term, increases in natural gas prices have forced eastern markets to make a switch from natgas fired heat to heating oil fired heat. That threatens the distillate supply which is already low and may amount to higher farm diesel pricing by spring. March 14 natural gas opened today at $5.16 and the March heating oil contract is mustering an upside run, opening today at $2.99.
National stocks of natural gas fell sharply again this week according to EIA, shucking another 262 billion cubic feet. That puts natgas supplies 29% below year-ago and 22% below the five-year average at just 1,923 billion cubic feet.
The biggest draw was in the Gulf Coast region where weekly withdrawals totaled 1 million barrels. Midwestern stocks got a much needed boost from production increases and actually added 800,000 barrels to the regional supply, but that won't last long as suppliers are delivering propane nearly as fast as producers can make it. Those production increases may limit the upside for Midwest propane, and this week your Inputs Monitor notes a 27 cent falloff from $4.09/gallon to $3.82. But those prices range wildly according to supply and delivery features and some areas are priced at $5.00/gallon or more.
Part of the draw on supplies is from the export market which continues to service demand in Japan, Mexico and China, but officials from some of the hardest hit states are now appealing to President Obama to halt exports until national supplies can get over the hump.