US propane stocks are still lagging behind last year's levels, largely due to strong overseas demand for the gas. (image: http://www.aeroenergy.com)
National propane stocks have posted their smallest increase in months, indicating that overseas demand for US gas exports remains strong.
Domestic propane inventories grew by a paltry 200,000 barrels in the week to August 8, to 49.6 million barrels. That’s the equivalent of 61.1 days’ supply at current usage levels. In comparison, there were 57.4 million barrels in storage this time last year – the equivalent of 69 day’s supply.
Figures released by the US Energy Information Administration today show the largest build in the last week occurred in the Gulf Coast region, where inventories rose by 400,000 barrels of propane. The Rocky Mountain/West Coast region added 100,000 barrels, but the East Coast and Midwest regional stocks both posted inventory declines 100,000 barrels.
Propane stocks have been building steadily during spring and summer. The warmer temperatures people use less gas to heat their homes. But the seasonal increase in domestic propane inventories is lagging behind last year’s levels. Experts put it down to the hangover effect of a very cold spring, which boosted demand for the gas.
Meanwhile, shortages overseas in countries like India and Nepal has resulted in significant export demand, cutting into domestic inventories here in the US.
China is also upping imports of alternative fuels as it reduces hydro electricity generation amid record droughts.
Though the US is enjoying strong domestic propane production currently thanks to shale gas reserves, demand levels is preventing the normal seasonal increases in reserve stocks.
Propylene non-fuel use inventories represented 4.9 percent of total propane inventories last week. Propane stocks have now grown by 23.1 million barrels in the last 16 weeks.