The Canadian Energy Board has put out a new propane outlook, offering the country’s forecast for the fuel over the next three months. The storyline up north looks a lot like it does in the U.S. — weakening demand at the end of the heating season, propane prices following crude oil up — but with a few specifically Canadian wrinkles.
•The Canadian inventory ended the heating season on the higher side — 10-percent above average, according to the report. (The U.S. stockpile has been on the low side.) That puts North American supplies “slightly below” their 5-year average.
•Demand for home heating naturally falls off as the weather warms up, but like a faulty stovetop, Canada doesn’t warm up evenly. The national weather office says the western half of the country will be chillier than usual through June; the eastern half will be warmer.
•For the month of February, the average price for propane at the major Texas hub hit its highest mark since September 2008. (Which resembles the trend in crude oil.)
•Propane production is on the rise, driven by the liquids-rich shale gas that energy companies on both sides of the border have been tapping. But that has coincided with a growing thirst for natural gas liquids from the petrochemical industry.
•The ongoing crude oil climb will put upward pressure on propane prices over the next three months, in the National Energy Board’s assessment. Meanwhile, uneven weather, average inventory levels, and variable demand will exert “uncertain” pressure on prices.