National propane stocks tumbled nearly two million barrels last week but inventories are in good health thanks to a relatively warm winter and weak demand.
The average residential per gallon price of propane nudged slightly higher in the last week but relative prices are only 5 cents a gallon higher than at the same time last year.
Propane inventories shrunk by 1.8 million barrels in the week ending January 30, closing at 49 million barrels. That’s the equivalent of 34.5 days’ supply.
At the same time last year, there were 37.9 million barrels of propane in storage – the equivalent then of just 22.8 days’ supply.
A mild start to winter has seen demand for heating taper off this heating season compared to last year. Though propane inventories have been falling steadily in recent weeks, the seasonal decrease is slower than in previous years thanks to the mild temperatures.
Releasing weekly figures late last week, the US Energy Information said propane inventories were currently above the five-year average, despite starting off the season at lower than average levels. The EIA attributes this to weak winter demand.
The Midwest region of the US led last week’s decline, shedding 1.1 million barrels of propane. East Coast stocks dropped by 400,000 barrels, while the Gulf Coast and Rocky Mountain/West Coast regional stocks each fell by 100,0000 barrels.
Propylene non-fuel use inventories, which are used to manufacture plastics, made up 10.2 percent of total propane inventories.
Meanwhile, the average residential propane price increased by less than one cent a gallon during the last week on the back of falling propane reserves.
Prices across the US are now 5 cents a gallon higher than at the same time last year. The gap has been falling steadily over winter because demand has not kept pace with that of last season, though overseas demand for the gas is helping stabilize prices.