Temperatures may be falling, but propane inventories have posted a large build in the last week, adding 1.2 million barrels.
Figures released by the Energy Information Administration show total US reserve propane stocks ended the week at 60.3 million barrels – the equivalent of 58.6 days’ supply. In contrast there were 64.4 million barrels in storage at the same time last year – the equivalent of 60.1 days’ supply at last year’s consumption rates.
Despite last week’s significant jump, propane inventories are still lagging behind last year’s levels and sit beneath the average range. With temperatures falling as the US heads into this year’s heating season, demand is likely to increase.
The East Coast and Gulf Coast regional stocks led last week’s increases, adding 500,000 barrels each. The Midwest region added 200,000 barrels and the Rocky Mountain/West Coast inventories were up slightly. Propylene non-fuel use inventories, which are used to make plastics, made up 6 percent of total propane reserves.
Meanwhile, the average residential propane price increased 2.5 cents a gallon in the last week. That meant average prices were already 36 cents higher than at the same time last year, with prices forecast to rise further once cooler weather kicks in. The data is part of the EIA’s State Heating Oil and Propane Program (SHOPP), which measures heating oil and propane prices across 24 states during the October to March heating season.
The EIA has forecast that average residential propane prices will be 7 percent higher this heating season than they were last winter.