Propane Inventories Contract

Increasing demand has seen propane inventories post their first fall in 20 weeks. (image: propaneresellersusa.com)

Propane inventories levelled out last week, declining slightly in the first domestic drawdown since winter.

The slight decrease in domestic propane reserves signals the restocking off season is coming to an end as demand for propane gas begins to build.

Propane inventories drew marginally in the last week to end at 53.5 million barrels – the equivalent of 63.9 days’ supply at current demand.

In contrast, propane inventories stood at 61.8 million barrels at the same time last year – the equivalent of 77.5 days’ supply at last year’s consumption rates.

Until last week, propane stocks had posted 19 consecutive weekly builds, adding 27.1 million barrels in that time. But despite the increases, the Energy Information Administration has warned that this year’s seasonal inventory build has lagged behind 2010 levels.

The slower pace of growth reflects strong overseas export demand for US propane, which is being produced domestically at record rates thanks to a surge in hydraulic fracturing for oil and gas in shale reserves.

Country’s like India, Nepal, China and Ghana are heavy users of propane, also known as liquid petroleum gas, which is used extensively for home heating and cooking. Shortages overseas has resulted in burgeoning demand for US propane supplies, slowing inventory growth.

A cold spring also meant more demand for propane early in the restocking season as people burned the gas to heat their homes.

In the last week, Midwest regional propane inventories fell by 1.1 million barrels as demand surged, while Gulf Coast stocks increased by 1.0 million barrels. Rocky Mountain/West Coast regional stocks added 100,000 barrels, while East Coast inventories drew slightly.

Propylene non-fuel use inventories represented 5.5 percent of total propane inventories, the EIA said.

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