The chilly nation was extra thirsty for propane last week, posting a 5.4 million barrel drawdown. (image: CHS Inc. via flickr.com)
Propane customers hoping to see their prices plateau were disappointed with the numbers the Energy Information Administration (EIA) put out this afternoon. Last week, the average retail price for a gallon of propane went up three cents, or just over one percent. And that’s a new high, breaking the previous highs of the week before.
The week’s gains mirror wholesale propane prices, which were up three-and-a-half cents on average last week.
So where’s the relief? That could take a while. Checking the stats from the last few years, retail propane prices typically flatten around mid-January, as the picture of the heating season develops. But they often don’t show signs of weakening till March, when demand slows.
And smack in the heart of winter, high demand is propping up current prices. The country’s propane inventory notched its biggest drawdown of the heating season last week, siphoning 5.4 million barrels to leave 45 million barrels in reserve, the EIA says. (The Gulf Coast was responsible for more than half that, slurping up 3 million barrels.) The cold weather and high demand are not promising tea leaves for propane customers.
Though we’ll end with one encouraging sign: Crude oil prices are dipping. The cost of barrel of crude has slipped almost $3 over the last two days, on a bearish inventory report and concerns that China’s economy is slowing down. And where crude goes, propane has been known to follow…