Trader's Corner
View Here!
View Here!

View Here!

View Here!


LP Gas June 2019 Cover


Propane prices driven
down by inventory build

Cost Management Solutions    
Cost Management Solutions


Weekly estimates from the Energy Information Administration show a robust U.S. propane export market. Exports have been above a million barrels per day (bpd) for 14 straight weeks, averaging 1.194 million bpd during that time.

Image: Cost Management Solutions
Click to enlarge. Image: Cost Management Solutions

However, over that same 14 weeks, propane production has averaged 2.072 million bpd. In addition, propane imports have averaged 135,000 bpd. That means there has still been 1.013 million bpd of supply for meeting domestic demand.

There has only been 760,000 bpd of domestic demand over that period, leaving 253,000 bpd to store. That has provided an average inventory build of 1.771 million barrels per week. The result is an inventory build that has been about 5.2 million barrels more than the same 14-week period last year. The higher inventory build has driven down propane prices.

This year’s inventory build has been about 371,000 barrels per week more than last year. Enterprise Products Partners will add 175,000 bpd of propane/butane export capacity by the end of the year. If we assume half is used for propane, it represents the potential to increase exports by 612,500 barrels per week. Assuming the world demands enough propane to use the capacity, the additional exports would take the downward pressure off propane prices.

We believe this prospect is leading to the wide gap between current month and core winter propane prices that is being seen now. Mont Belvieu LST core winter is trading 9.5 cents higher than July, and Conway winter is trading 20 cents higher than July.

Whether front-month propane prices start moving toward core winter values, or whether core winter values move down toward current front-month values between now and winter, could largely depend on how effective the new export capacity will be in balancing U.S. supply and demand.

Image: Cost Management Solutions
Click to enlarge. Image: Panama Canal Authority

Propane supply updates from LP Gas:
More propane transiting expanded Panama Canal
The flow of hydrocarbon gas liquids through the Panama Canal from the U.S. Gulf Coast to Asia has increased since the canal expanded in 2016.

3Eight Energy to help propane retailers build supply partnerships
3Eight Energy is a new wholesale and consulting company focusing on the independent propane retailer in the Southeastern and Mid-Atlantic states.

UP Energy Task Force to devise propane plan
Michigan’s new administration is exploring alternatives to propane distribution through Enbridge’s Line 5 pipeline.

Find CMS on Facebook Questions? Email CMS Try a 10-day Trial of PPI

View Here!

View Here!

View Here!

View Here!
Market Information Services

The Propane Price Insider is an email 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, weather maps and complete review of energy prices that are based on propane's Btu equivalent
For a free 10-day trial subscription by email, sign up online here or call 888-441-3338.
Unbiased Analysis

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.

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

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
  • Large volume consideration when we place your hedges
Contact us GOT STORY IDEAS? Email Brian Richesson, Editor in Chief

You are subscribed to Trader's Corner as @{Email Name}@.

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.

Look forward to us each Monday? Don't forget to also subscribe to the magazine or renew your subscription.

LP Gas Magazine is a property of North Coast Media, LLC.
1360 E. Ninth St., 10th Floor, Cleveland, OH 44114
© 2019 North Coast Media. All Rights Reserved.
Reproduction in whole or in part is prohibited without written permission.