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DIGITAL EDITION

January 2018 cover


THIS WEEK'S TOPIC:
PROPANE EXPORTS

US propane exports
drop significantly

By MARK RACHAL
Cost Management Solutions    
Cost Management Solutions

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In its Weekly Petroleum Status Report last Wednesday, the Energy Information Administration reported U.S. propane exports dropped to 647,000 barrels per day (bpd) between Jan. 25 and Feb 1, compared to 1.093 million bpd the prior week.

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Fog on the Houston Ship Channel may have slowed export activity since the beginning of January. It is also possible exports slipped because of the Chinese New Year, which kept Asian buyers out of the market.

On Jan. 29, industry data estimated exports for January would reach 34.4 million barrels. However, the estimate released Feb. 5 dropped to 31.2 million barrels. The revision suggests shipping delays occurred.

With exports so critical in keeping U.S. supply and demand balanced, the falloff in exports resulted in a below average draw on inventory – despite a 374,000-barrel jump in U.S. propane demand. Inventory fell 2.636 million barrels during the fifth week of this year. Over the past five years, inventory draw during the fifth week of the year averages 3.902 million barrels.

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High rates of propane production, high inventory levels and relatively soft growth in propane exports have created a bearish fundamental situation for propane that could continue beyond winter.

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