Propane News

Weekly Inventory Results

07/19/18-U.S. propane/propylene stocks increased by 1.7 million barrels last week to 65.3 million barrels as of July 13, 2018, 7.1 million barrels (9.8%) lower than the five-year average inventory level for this same time of year. Midwest and East Coast inventories increased by 1.3 million barrels and 0.9 million barrels, respectively, while Gulf Coast inventories decreased by 0.5 million barrels and Rocky Mountain/West Coast inventories dipped slightly, remaining virtually unchanged. Propylene non-fuel-use inventories represented 3.9% of total propane/propylene inventories.

NPGA Propane Inventory Report Summary

June 2018

EIA Petroleum Supply monthly data showed that Q1 2018 propane exports were indeed lower than Q1 2017 propane exports. In spite of this, total US inventory on a days of disposition basis is entering the summer months at levels lower than last year. Latest weekly data from the EIA shows that the pace of inventory growth is outpacing previous years and trends report forecast shows that growth in inventory (specifically in PADD 3) will help the US as a whole return to normal levels prior to the winter.

Production growth should allow days of disposition to increase at a faster pace than last year during the late summer months. However, if crude prices remain high, naphtha prices in Asia follow and propane gains competitiveness as a chemical feedstock thereby encouraging US exports. Thus if crude prices remain elevated through the remainder of the year, exports may be higher than currently forecasted in the trend report leading to the possibility of low days of disposition again this winter.

Thus far in Q2 2018, IHS Waterborne data does indicate that exports are higher than Q2 2017.On a PADD level, PADD 2 inventory quickly recovered over the past month recovering from five-year lows in May to average levels in June.


 Factors Affecting Domestic Inventories

 Domestic propane supply is affected by primarily four factors (Exports, Petrochemical Demand, Crop Drying and Weather).  

  1. Exports - Exports have become one of the largest factors impacting inventories, especially in PADD 3, the Gulf Coast area.  As export terminals continue to be constructed in the Gulf Coast, this factor will play a larger role in overall domestic inventory.
  2. Petrochemical Demand – Since the domestic supply situation is improving with more production coming from the shale regions, petrochemical companies will continue to rely on natural gas liquids (NGLs) as their primary feedstock.
  3. Crop Drying – Agriculture continues to be the largest industry in the US.  Propane plays a critical role in removing moisture from crops to avoid spoilage in storage.  When crops have high moisture content, propane supply is affected significantly over a relatively short period of time.  In the fall of 2013, agriculture in the Midwestern states alone consumed over 325M gallons of propane.  This significant draw on supply did not allow inventories to recover all winter.
  4. Winter Weather – One of the smallest primary inventory sectors is PADD 1, which covers the Northeast and Middle Atlantic areas of the country.  Extended cold weather can have a significant impact on supply availability. Propane continues to be a primary fuel as a heat source in this part of the country.



When discussing prebuy options with our customers, it is our belief that you should sell what you buy and buy what you sell.  Most traders will readily admit that they cannot predict what the market will do.  As a retailer, we believe the same holds true.  When it comes to prebuy positions, you should be evenly hedged.  Prebuys can provide a nice hedge for those customers looking to lock in gallons and pricing for the year.  Please let us know if you are interested in this program.