Taking a deeper look at propane price uncertainty
October 15, 2018 By Mark Rachal and Dale Delay
Throughout last week, Mont Belvieu’s price correction deepened and its value relative to crude continued to deteriorate.
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Throughout last week, Mont Belvieu’s price correction deepened and its value relative to crude continued to deteriorate.
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The pricing pattern for March and May turned out to be very similar, but April was a little different.
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U.S. propane production is much higher than domestic propane demand, leaving propane exports to play the role of balancing U.S. supply with demand.
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Propane prices saw a significant change in April. Get more details on this shift.
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This year, domestic demand has remained high due to a long winter heating season, when compared to recent winters.
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Last Wednesday the EIA reported that U.S. propane inventory stood at 35.872 million barrels for the week ending April 13.
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The U.S. Energy Information Administration reported U.S. domestic demand for propane at 1.496 million barrels per day (bpd) for the week ending April 6.
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Propane’s relative value to West Texas Intermediate crude is already slightly below the low end of the range we expected for this summer.
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Change has been in the works for several years now as the U.S. propane market has become a net exporter of propane.
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Last week, the U.S. Energy Information Administration reported U.S. propane inventory had fallen to 36.759 million barrels for the week ending March 16.
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