The winter heating season is starting to chip away at national propane inventories which have posted declines for two consecutive weeks.
Figures released by the Energy Information Administration yesterday show reserve propane stocks took their biggest hit of the season last week, dropping 600,000 barrels. There are now 59.6 million barrels in storage – the equivalent of 52.8 days’ supply at current demand. In contrast there were 64.7 million barrels in storage 12 months ago – the equivalent then of 62.6 days’ supply.
Propane inventories have been building over the summer and autumn, which is the traditional off-season for propane demand. But strong overseas demand has eaten into reserve stocks and left inventory levels tracking below last year’s tally.
The Midwest region experienced the biggest draw last week, falling 300,000 barrels. The East Coast and Gulf Coast regional stocks each fell by 100,000 barrels, and the Rocky Mountain/West Coast regional inventories were also down slightly.
Propylene non-fuel use inventories, which are used to manufacture plastics, accounted for 6.5 percent of total propane reserves.
Meanwhile, the average residential propane price increased less than one cent a gallon in the last week. That meant average prices are now 30 cents higher than at the same time last year. Prices increased across all regions except the Lower Atlantic where the average price fell slightly.
The data is compiled weekly by the EIA for its State Heating Oil and Propane Program (SHOPP), which measures heating oil and propane prices across 24 states during the October to March heating season.
The EIA has forecast that average residential propane prices will be 7 percent higher this heating season than they were last winter.