Propane Price Insider
ppi ppi ppi ppi
ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi
ppi ppi ppi ppi ppi


Click here for a free, 10-day trial of The Propane Price Insider!

Call Cost Management Solutions today at 888-441-3338 for more information about how Client Services can enhance your business or drop us an email at

Trader's Corner

This week’s Trader’s Corner looks at propane exports and the potential impacts of Enterprise Products Partners closing its export terminal for two weeks.

U.S. propane inventory has been building at a rapid pace this summer. Inventory fell to a low of 25.658 million barrels during the third week of March. Thirteen weeks later, they stand at 53.671 million barrels. That is a gain of 28.013 million barrels, an average of 2.155 million barrels per week. The average build over the same 13-week period over the last five years has been 17.118 million barrels or 1.317 million barrels per week.

The inventory builds were actually running below normal for a few weeks to start the building season, but the gains over the last nine weeks have been above average.

As a result, U.S. inventory is now well above average, as well. The rate of inventory gain over the next two weeks may actually increase.

For inventory to build, export, petrochemical and retail demand must all be met, with propane left over to go into inventory. One of those demand segments is expected to see a significant drop over the next two weeks.

Enterprise Products Partners took down its export facility along the Houston Ship Channel for maintenance work on June 23, and it is expected to be down for two weeks. The closing of that facility should start showing up in Energy Information Administration (EIA) Weekly Petroleum Status Report data within the next week.

What will be the impact on inventory? Let’s begin with the 2.155 million barrels that inventories have averaged building each week this year – with the export facilities running. An industry source that specializes in natural gas liquids exports believes seven very large cargoes will not ship during the time Enterprise is down for maintenance, which could potentially add about 3.8 million barrels to inventory.

If we add the weekly average build to the potential additional barrels going to inventory due to reduced exports, we would have a gain in inventory of 8.11 million barrels over the next two weeks.

Through the last EIA report, U.S. inventory needs to gain 13.804 million barrels to reach 67.475 million by Oct. 1. That is the average beginning winter inventory position over the last five years.

If inventory builds 8.11 million barrels over the next two weeks, national inventory levels would only be 5.694 million barrels short of the target with 12 weeks of inventory builds to go. That is an average weekly build of just 474,000 barrels to reach the target.

Should the inventory build revert back to the 2.155-million-barrel pace once Enterprise resumes export operations, inventory would reach 87.641 million barrels by Oct. 1. That would easily eclipse the 75.896-million-barrel position for Oct. 1 set in 2012.

However, even though propane supplies continue to build, it’s doubtful inventories would continue building at the 2.155-million-barrel average pace this year. We expect a little more use from petrochemicals. Also, Targa will complete its 2-million-gallon-per-month export expansion in August or September. Just the Targa expansion will likely take at least 2 million barrels off the total. Still, there is a good chance propane inventory will eclipse the 2012 position of 75.896 million barrels – and possibly by a good margin.

So there is the good news for propane retailers. Here is some of the bad news. According to industry sources, Enterprise is performing this two-week shutdown for work that will allow it to expand its export facility in 2015. The expansion is said to increase Enterprise’s export capacity from 7.5 million barrels per month to 14 million barrels per month.

Targa’s expansion, which is near completion, will increase its export capacity from 4 million barrels per month to 6 million barrels per month. The combination of Enterprise and Targa should have export capacity of 20 million barrels sometime next year.

In this supply-and-demand race, supply has the upper hand at the moment, which is why we are seeing such significant jumps in inventory. But demand is about to make a big jump over the next year. Keep in mind Targa and Enterprise are not the only export players in town. Other facilities are being built. Ultimately the sides will balance, but for now we will enjoy watching the supply side take the lead in the race.

Call Cost Management Solutions today at 888-441-3338 for more information about how Client Services can enhance your business, or drop us an email at

Some of the supports for crude faded this week, allowing the downtrend in prices to continue. With building inventory and falling crude, the upward momentum in propane faded, as well. We are neutral going into the week.

Monday: The run higher for U.S. propane prices that began on June 11 finally ended with pullbacks at both hubs. Reports of near-record exports of Iraqi crude from its southern terminals sent crude lower.

Tuesday: Conway propane bounced back from Monday’s loss with a 7/8-cent gain. Crude prices slipped again as Russia made moves to encourage peace in Ukraine.

Wednesday: Propane traders shook off another above-average build in propane inventory to follow crude higher. West Texas Intermediate crude moved higher on news the U.S. government would allow the export of condensate.

Thursday: Propane gave up its gains of the previous two days as crude drifted lower. Less concern that fighting in Iraq would impact Iraqi crude exports had crude traders taking profits.

Friday: Propane prices were little changed on light trading volume. Crude was also little changed. Propane and crude appear a little overdone and buyers have become cautious.

ppi ppi ppi ppi

LP Gas Magazine is also on Facebook and Twitter


Click Here!

Click Here!

Click Here!

Click Here!

ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi ppi
ppi ppi ppi ppi ppi

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.

Market Information Services
The Propane Price Insider, an e-mail 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, Trader's/Hedger's Corner, Weather maps and complete review of energy prices that are based on Propane's Btu Equivalent

Free trial!
For a free 10-day trial subscription by e-mail, sign up online here or call toll-free at 888-441-3338.

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
  • Because of the volume of transactions we place annually, we receive large volume consideration when we place your hedges

Visit us online at Or e-mail

Contact us today to see if you can benefit from having the Energy Price Watchdog working for you.

Dale G. Delay 888-441-3338,
Mark Rachal 888-441-3338,

ppi ppi ppi ppi ppi

LP Gas Magazine

For advertising information, contact:
Brian Kanaba, Publisher

You are currently subscribed to Propane Price Insider as %%EMAILADDR%%.

Forward to a friend  | Change your subscription preferences  |   New subscriber sign-up
If you wish to leave this mailing list, simply unsubscribe. | Refer to our Privacy Policy.

LP Gas Magazine is a division of North Coast Media LLC.
1360 East 9th St., Suite 1070, Cleveland, Ohio 44114
© 2014 North Coast Media. All Rights Reserved.
Reproduction in whole or in part is prohibited without written permission.