Propane inventories continue their seasonal slide, posting a 1.1 million barrel decline in the last week, with prices residential nudging slightly higher.
Figures released Thursday by the US Energy Information Administration show total reserve propane stock fell to 53.2 million barrels in the week to January 13 – the equivalent of 38 days’ supply. A year ago inventories were even tighter, with just 45.1 million barrels in storage, the equivalent of 29 days’ supply at the time. In it’s weekly petroleum wrap, the EIA said current propane inventory levels were at “the upper end of the five-year range.”
Despite a boom in propane production on the back of bountiful US shale oil and gas reserves, propane inventories have been falling steadily in recent weeks as winter heating demand builds. But a mild start to winter has seen less demand for the heating and cooking gas than is typical at this time of year. As a result, inventories are in pretty good shape as we move into what is normally the fiercest past of the winter heating season.
With plenty of reserve stock, propane prices could flatten out somewhat, giving consumers some welcome relief. Despite the mild winter, strong export demand for propane gas from bullish emerging economies has buoyed prices nationwide, especially in the Northeast. The average residential propane price nudged a cent higher last week and is currently 8 cents higher than at the same time last year.
The East Coast region led last week’s draw, with stocks dropping by 400,000 barrels. The Midwest and Gulf Coast regional inventories each fell by 300,000 barrels and the Rocky Mountain/West Coast stocks declined slightly.
Propylene non-fuel use inventories, which are used to manufacture plastics products, accounted for 10 percent of total propane inventories in the last week.