Trader's Corner
View here!

View here!

View here!

View here!

THIS WEEK'S TOPIC:
PROPANE INVENTORY

Propane inventory trends forecast lower end-of-year levels
By MARK RACHAL
Cost Management Solutions    
Cost Management Solutions

Visit propanecost.com

For the week ending June 30, the Energy Information Administration (EIA) reported a 2.118-million-barrel build in U.S propane inventory. The build put total U.S. propane and propylene inventory at 60.569 million barrels. The build was slightly less than industry expectations for a 3-million-barrel build, but slightly higher than the five-year average build for week 26 of the year of 1.804 million barrels. The more traditional build followed a massive 3.918-million-barrel build the prior week, which was nearly double the norm for week 25 of the year.

Despite the recent builds, propane inventory could be at a significantly lower level by the end of 2017.


Featured photo

Last year propane inventory reached 104 million barrels. It is highly unlikely inventory will approach that level this year unless inventory builds around 4 million barrels become the norm.

In the chart above, the yellow markers represent the exact inventory builds posted last year between mid-summer and the first week of October. The same builds this year would result in propane inventory reaching 82.378 million barrels at the same point in October that it reached 104 million barrels in 2016.

The black markers in the chart above show the exact inventory decline that occurred after the inventory high was reached through the end of 2016. That same decline this year would leave propane inventory at 62.619 million barrels. The result would be a 21.504-million-barrel draw on inventory between the end of 2016 and the end of 2017.
(continued below)

Visit propanecost.com
Find CMS on Facebook Questions? Email CMS Try a 10-day Trial of PPI

Featured photo

The table above shows end-of-year inventory positions over the last five years. Should the forecast above come to fruition, it would mark the second year that propane inventory has declined significantly and would be a major departure from the inventory builds of 2014-15 when propane prices were experiencing downward pressure.

U.S. propane export rates in the area of 800,000 barrels per day (bpd) would likely result in an inventory trend very similar to the one above. Exports averaged only 620,000 bpd in June, which has allowed for improved inventory accumulation rates. But, there is talk of fewer cargo cancellations for July, which could see export rates move toward the 800,000-bpd mark. Exports averaged 878,000 bpd in May.

As the season rolls closer to fall, there will likely be more global demand for U.S. propane. It is quite conceivable that June could turn out to be the low water mark for U.S. propane exports in 2017. The inventory position could be better at the end of the year if exports don’t recover, but for now the wise play is to guard against the possibility that they will.

Visit propanecost.com

View here!

View here!

View here!

View here!
WHAT IS COST MANAGEMENT SOLUTIONS?
Market Information Services

The Propane Price Insider is an email service that provides:
  • Three daily price Flash Wires
  • Periodic option quotes
  • Wednesday inventory data updates around 11 a.m. ET
  • 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.
Unbiased Analysis

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.

Client Services

Many retailers simply don't have time to analyze the large amounts of data to make an informed purchasing decision.

We offer:

  • Detailed market recommendations on hedge and pre-buy entry points
  • Prompt market execution of hedging strategies
  • Supply cost analysis and recommendation as to effective hedging strategies
  • Large volume consideration when we place your hedges
Contact us GOT STORY IDEAS? Email Brian Richesson, Editor in Chief
LOOKING FOR ADVERTISING OPPORTUNITIES? Email Brian Kanaba, Publisher