Propane Stock Build Tapers Off

Clean-burning propane gas produces significantly less carbon emissions than traditional fuels, creating less damage to the earth's ozone layer. (image: treehugger.com)

The US propane inventory build is drawing to a close with reserve stocks still tracking well below last year’s levels.

With the commencement of the heating season this month, temperatures are beginning to drop and demand for propane gas as a heating fuel is starting to grow. That means the traditional stock build season for propane reserves is nearing an end.

Figures released yesterday by the US Energy Department show national propane stocks added just 400,000 barrels in the last week to finish at 57.9 million barrels – the equivalent of 57.6 days’ supply at current demand rates.

At the same time last year, there were 64.2 million barrels in storage – the equivalent of 62 days’ supply.

Propane.pro reported last week that propane stocks were at their lowest pre-heating season level since 1996. This is despite bountiful domestic supplies of propane in the US thanks to shale gas reserves and propane stocks posting increases for 24 of the last 25 weeks.

But strong overseas demand for the gas from countries like India and China, and a cool spring earlier this year have eaten into reserve inventories, meaning they have not grown at forecast rates.

With the heating season now upon, stockpile declines should begin to accelerate. The relatively low level of reserve stocks could influence prices here in the US, particularly if supply disruptions emerge later in the season.

The East Coast and Gulf Coast regions led last weeks modest increases, both posting 200,000-barrel builds. The Midwest and Rocky Mountain/West Coast stock levels were both up marginally.

Propylene non-fuel use inventories, which are used to produce plastics, represented 5.9 percent of total propane inventories, Energy Department figures show.

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