As the field work finishes up and the holiday season is almost here, we are still waiting for winter. Will it get cold? Will there be enough supply? What will prices do? Forecasters tell us that colder weather is just around the corner. Let's look at inventories, demand, exports, and production to find some answers to these questions.
Total U.S. propane inventory stands at 100.8 million barrels; that is the second highest level that we have ever had on record at this time of year. Last year set the historical record for week 45 with 104 million barrels. Looking at the inventory makes one feel very good about supply compared to a five year average of only 75 million barrels. Five years ago I would have never thought that 75 million barrels would be a low number. As inventories have changed so have exports.
In early 2013, propane exports were only 100,000 barrels per day. In mid-September of this year it looked like exports peaked out at 1,100,000 barrels per day. The Energy Information Administration changed to near real-time export data reporting on August 31 of this year which has greatly improved weekly estimates. It looks like we are settling in around 700,000 barrels per day for now. So while we have a lot of product in storage compared to just a few years ago we have more than quadrupled our exports.
Like demand, production has change greatly over the last few years. If one were to look at a supply/ demand chart they would see that both of these are running parallel to each other and both continue to increase. If that is the case and exports have peaked out now and started to decline, it would leave one to believe that we will have enough propane for this winter especially taking into consideration the late start we are getting.
Although things look very good today for supply, we need to make sure that we keep tanks full so that once winter does arrive we are prepared. Keep in mind that one VLGC (Very Large Gas Carrier) can hold around 2 million barrels, so loading just one more ship a week can really change inventories in the U.S. Anytime there is increased demand for an extended period of time, pipelines will struggle to keep up.
Keep your tanks full this time of year by contacting your FS Propane Specialist .
Dan Pannier serves as the FS System as GROWMARK Propane Operations Manager. He can be reached at firstname.lastname@example.org.