Written on: March 27, 2023
Last week, the Energy Information Agency (EIA) released data showing U.S. propane inventory at 58.7mm barrels, down 2.3mm barrels from a week earlier. More significantly, inventory levels are up a full 25.1mm barrels from the level of 33.6mm barrels a year ago.
Does this guarantee propane inventory will be strong going into the 2023-24 winter season? Experts believe there is a good change we will enter 2023-24 at healthy levels but warn that U.S. propane exports will hold the key and exports of propane have been strong lately. In the week ending February 10, exports reached a record 1.845mm barrels per day (bpd). Exports backed off to 1.675mm bpd, 1.571mm bpd and 1.377mm bpd during the next three weeks but were back up to 1.756mm bpd and 1.804mm bpd in the weeks ending March 10 and March 17.
Exports to Asia, especially China, may increase due to a likely economic rebound in the second half of 2023 as demand for chemical feedstocks builds. As many as 45 new LPG shipping vessels will be added to the global fleet in 2023.
For the most part, mild temperatures and decent inventory levels allowed 2022-23 winter to go smoothly across much of the U.S. There were short product outages in the West as high natural gas prices discouraged NGL production.
On Monday, March 27, propane ended the day trading near 79 cpg at Mt. Belvieu and 75 cpg at Conway, KS. Crude oil ended the day trading near $73 per barrel.