Propane’s relative value to crude continues to set five-year highs
June 5, 2017 By Mark Rachal and Dale Delay
Last week, the Energy Information Administration reported U.S. propane inventory increased 3.446 million barrels.
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Last week, the Energy Information Administration reported U.S. propane inventory increased 3.446 million barrels.
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U.S. crude inventory is falling and that is helping fuel the recent uptrend in crude prices.
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There was a little less nervousness last week after the EIA’s weekly inventory data finally showed a significant build in U.S. propane inventory.
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Propane prices have been falling since mid-April as weakening export economics worry traders.
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Last year, only slightly more than 20 percent of U.S. propane came from the refining of crude oil.
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The way last winter ended helps to form the foundation for Mike Sloan’s propane market outlook, which he presented at the NPGA Propane Expo.
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Nearly 80 percent of U.S. propane production came from natural gas processing last year. Natural gas production is the engine that drives natural gas supply.
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For the week ending March 31, the U.S. Energy Information Administration reported a 1.213-million-barrel draw in U.S. propane inventory.
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By now, almost everyone knows that the Organization of the Petroleum Exporting Countries and other major crude-producing nations have reduced their production.
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U.S. propane prices are hammered when propane inventory data doesn’t line up with industry expectations.
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