Upward pressure on propane prices continues
July 13, 2021 By Mark Rachal
Propane production needs to stabilize or grow to change the pricing environment so propane prices fall again, says Mark Rachal of Cost Management Solutions.
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Propane production needs to stabilize or grow to change the pricing environment so propane prices fall again, says Mark Rachal of Cost Management Solutions.
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Not only does EIA data show propane inventory near five-year lows, but prices at Mont Belvieu topped the $1-a-gallon mark for the first time since 2018.
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Cost Management Solutions’ Mark Rachal discusses the heating season of 2020-21, highlighting factors that led to upward pressure on propane pricing.
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The Midwest has been oversupplied and low-valued long enough that it lacks investment to meet needs in high-demand periods, says Mark Rachal.
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Days of supply measures available inventory to demand. As long as days of supply are trending lower, prices are certainly going to feel upward pressure.
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Since last week’s Trader’s Corner, there was a dramatic change in U.S. propane prices. The change began after the Martin Luther King Jr. Day holiday.
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As long as export demand remains strong, there is likely to be continued pressure on inventory and thus support for propane prices.
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Residential propane prices during the first two weeks of the winter heating season were 4 percent lower than during the same time last winter, the EIA reports.
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Mark Rachal of Cost Management Solutions takes a close look at propane inventory trends ahead of peak demand season.
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This past week, we got an email from one of our clients expressing confusion about U.S. propane production….
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