US propane inventories have fallen for the fifth straight week to continue their seasonal draw with residential prices edging slightly higher.
Figures released by the US Energy Information Administration show national propane reserves shrunk by one million barrels in the week ending December 30. There are now 55.2 million barrels of propane gas in storage – the equivalent of 38.6 days’ supply. In contrast there were 52.5 million barrels in storage 12 months ago – the equivalent of 34.6 days’ supply at last year’s consumption rates.
Propane stocks have been falling steadily in recent weeks as winter demand begins to eat into reserve supplies, though a mild start to winter has meant a slower draw than in previous years.
For months, the amount of propane in storage has lagged well behind last year’s inventory levels – despite a boom in domestic propane production – mainly because of strong export demand for the gas fuel from countries like China and India.
However, propane inventories now total more than reserve levels at this time in 2011. There is also enough reserve propane to feed more days of US demand than at the same time last year. This has the potential to dampen prices.
The Gulf Coast region experienced the largest decline in the last week, shedding 600,000 barrels. Midwest regional stocks dropped by 200,000 barrels, Rocky Mountain/West Coast regional stocks fell by 100,000 barrels and East Coast regional stocks were down slightly.
Propylene non-fuel use inventories, which are used to manufacture plastics, made up nearly 10 percent of total propane inventories – a figure marching higher by the week.
Meanwhile, average residential propane prices have edged slightly higher, gaining less than one cent in the last week. Average prices are currently 13 cents a gallon higher than at the same time in 2011.