U.S. propane inventories, including propylene, ended September at a record high level of 75.6 million barrels after rising 22 percent in the third quarter, the U.S. Energy Information Administration (EIA) reports. The Gulf Coast region accounted for 60 percent of the quarterly rise in propane inventories.
The EIA cites increased natural gas production from shale plays as the main reason behind propane’s high supply heading into the winter heating season. Producers have focused on shale fields that are high in natural gas liquids, currently more profitable than dry gas production, the EIA notes.
In addition, the average weekly spot price for propane sold from storage facilities in Mont Belvieu, Texas, was at its lowest level since the third quarter of 2009, according to the EIA. Propane averaged 89 cents per gallon for the week ending Sept. 28.