Propane News

Weekly Inventory Results

6/19/19-U.S. propane/propylene stocks increased by 3.3 million barrels last week to 74.5 million barrels as of June 14, 2019, 10.7 million barrels (16.8%) greater than the five-year (2014-2018) average inventory levels for this same time of year. East Coast, Midwest, and Gulf Coast inventories each increased by 1.1 million barrels. Rocky Mountain/West Coast inventories fell slightly, remaining virtually unchanged. Propylene non-fuel-use inventories represented 6.6% of total propane/propylene inventories.

NPGA Propane Inventory Report Summary

May 2019

Increase in propane field production growth forecast combined with export infrastructure constraints lead to forecast elevated stock levels at least through 2020.

U.S. propane production growth continues to increase and at a faster than expected pace. IHS Markit has increased its forecast for growth in total propane field plant production through 2019 and 2020. Exports have been the recent source of balancing demand in the face of the growing supply pressure from the increases in production. Recent EIA weekly estimates of exports have been bouncing around historic record levels since mid-April. IHS Markit’s Waterborne Live service data shows that Gulf Coast LPG exports through April were at the announced capacity of the operating terminals, while preliminary May numbers are showing a similar export level. With waterborne terminals operating at capacity and expansions not coming online until the end of the third quarter of the 2019 (Enterprise) and halfway through 2020 (Targa) exports are not forecast to be able to grow much faster than previously forecast to match the increasing forecast supply. With faster growing supply and a restricted outlet, stocks are expected to continue to build through 2019 and remain elevated in 2020.


 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.