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DIGITAL EDITION
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THIS WEEK'S TOPIC:
PROPANE SUPPLY
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Refineries see gain in 2016 propane output as gas plant supply growth wanes
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In 2016, U.S. refineries only provided 20.67 percent of the total fuel-use propane supply of 1.461 million barrels per day (bpd). The majority of propane now comes from natural gas processing. Last year, processing provided 1.159 million bpd of fuel-use propane, and refineries provided 302,000 bpd.
With propane supply abundant, refineries have been tweaking their processes to maximize propylene production, sometimes at the expense of fuel-use propane.
Last year, refineries did increase fuel-use output as their overall throughput increased. It was a positive development for propane supply, as the growth in propane supply from natural gas processing plants slowed dramatically.
Fuel-use propane from refineries increased from 283,000 bpd in 2015 to 302,000 bpd last year. Meanwhile, growth in supply from natural gas plants went from 168,000 bpd in 2015 to just 42,000 bpd in 2016.
(continued below)
Propylene output has remained fairly steady at around 280,000 bpd since 2010, even when overall output has gone up. We expect that is due to process limitations. Therefore, as the U.S. economy improves and refinery throughput increases, we expect fuel-use propane to be the bulk of the gain.
Still, it will not be nearly enough to offset the declines in fuel-use propane from natural gas processing. Slower growth in fuel-use propane supply could lead to tighter supplies going forward if export volumes remain robust.
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WHAT IS COST MANAGEMENT SOLUTIONS?
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The Propane Price Insider is an email service that provides:
- Three daily price Flash Wires
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- Wednesday inventory data updates around 11 a.m. ET
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Evening report with executive summary, weather maps and complete review of energy prices that are based on propane's Btu equivalent
For a free 10-day trial subscription by email, sign up online here or call 888-441-3338.
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Cost Management Solutions LLC (CMS) is a firm dedicated to the analysis of the energy markets for the propane marketplace. Since we are not a supplier of propane, you can be assured our focus is to provide an unbiased analysis.
Contact us today to see if you can benefit from having the Energy Price Watchdog working for you.
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Many retailers simply don't have time to analyze the large amounts of data to make an informed purchasing decision.
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Supply cost analysis and recommendation as to effective hedging strategies
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