A lobster from Maine, where propane prices jumped four pennies last week. (image: Joe Shlabotnik via flickr.com)
Propane has been acting funny.
Though the heating season is winding down, spot prices at the major Mont Belvieu hub exploded yesterday. We’re still trying to figure out what motivated Monday’s market mayhem — a midstream provider declaring force majeure on its contracts? lingering supply concerns after a storage facility fire? a colonel in Libya? — but this much we know: a gallon of propane went for $3* in Texas yesterday. That amounted to a 93-percent increase since Friday, and by a very large margin was the highest ever spot price in Mont Belvieu.
Signs suggest that the market corrected itself today, and prices have dropped to about half that. But the instability could ripple downstream, precisely when propane prices should be relaxing into the tail end of the heating season. (That being said, prices have kept steady at the Kansas hub.) So we’re looking at the week’s first price report from Maine, to get a sense for what the retail market could do this week. In the Pine Tree State, residential propane prices jumped four cents last week, or about 1.4-percent, according to the Maine Public Broadcasting network. (That’s better than heating oil or kerosene, which both rose 15 cents in Maine.)
The government numbers come out tomorrow. Might be too early for the retail price report to reflect Monday’s trading, but we’re bracing for some unexpected turbulence.
*so says the Wall Street Journal.