Propane News

Weekly Inventory Results

1/16/19-U.S. propane/propylene stocks decreased by 1.2 million barrels last week to 67.5 million barrels as of January 11, 2019, 0.4 million barrels (0.6%) lower than the five-year (2014-2018) average inventory levels for this same time of year. Gulf Coast inventories decreased by 0.8 million barrels, Midwest inventories decreased by 0.6 million barrels, and Rocky Mountain/West Coast inventories decreased slightly, remaining virtually unchanged. East Coast inventories increased by 0.2 million barrels. Propylene non-fuel-use inventories represented 8.1% of total propane/propylene inventories.

NPGA Propane Inventory Report Summary

December 2018

Higher supply via gas plants and refineries post turnaround season reduces risk of critical days of disposition this winter

Higher gas plant supply and historically high refinery utilization rates helped propane supply overcome stronger export demand in November and December. While inventory continues its seasonal decline, with the latest supply levels witnessed over the past several months, it is increasingly unlikely that the US, as a whole, will experience critical days of disposition in Q1 2019.


 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.