Propane

[Fraser921]

U.S. propane inventories fell below the 5-year minimum during the month of August.
The differential between Mont Belvieu and Conway propane dropped to below zero in August due to Midcontinent/Midwest markets rebuilding inventory balances prior to the upcoming winter season.
The propane-to-crude ratio moved up from an average of 63% during the month of July to 72% in August as propane prices moved up about 5% during the month while the crude oil price declined about 4%.

[Fraser921]

EIA released the Weekly Petroleum Status Report this morning for the week ending September 10. Propane and propylene inventories rose less than expected. Inventories increased by 717 Mbbl to 70.8 MMbbl, which was an increase of 103 Mb/d. Inventories are now 27.9 MMbbl below 2020 inventories and 2.2 MMbbl below the 5-year minimum.

PADD 3 (Gulf Coast) inventories dropped by 313 Mbbl to 33.2 MMbbl and are now 2.5 MMbbl below the 5-year minimum. Although PADD 2 (Midwest) inventories rose by 894 Mbbl, they remain 2.3 MMbbl below the 5-year minimum.

PADD 1 (East Coast) inventories decreased by 115 Mbbl to fall 74 Mbbl below 5-year maximum. PADD 4 (Rocky Mountain) plus PADD 5 (West Coast) inventories increased by 251 Mbbl and are now 136 Mbbl below the 5-year maximum.

Production was down by another 77 Mbbl/d to 2,217 Mb/d, from 2,294 Mb/d the prior week mainly due to Hurricane Ida and tropical storm Nicholas. Exports were down by 112 Mb/d from 1,412 Mb/d last week, to 1,300 Mb/d while product supplied was up 27 Mb/d from last week at 1,861 Mb/d to 888 Mb/d this week.

[dan_s]

Propane Prices: https://www.barchart.com/futures/quotes ... res-prices

Propane prices have more than tripled from a year ago.

[Fraser921]

9/20: Propane to WTI Ratio Approaches 80%

While the price of propane rose to 134.2 c/gal on September 17, the propane to WTI ratio approached 80%, increasing to 78.5%. The price of non-TET propane has also risen by over 17 c/gal during the first half of September which is the second largest monthly increase in the past 1.5 years.

[dan_s]

I am increasing the price of NGLs in my forecast models, but probably not high enough for Q4.

If you know anyone that heats their home with propane, they should fill up all of their tanks now and keep at least one extra tank full. U.S. propane inventories are WAY BELOW the 5-year average and there is NO WAY to fill them before winter arrives.

When I worked at Hess (1983 - 2002) we sold over 3 million gallons of propane into the Minnesota market each winter. Our storage facility in western Minnesota was completely drained each winter.

Continental Resources (CLR) sells a lot of NGLs into that market. This is also good news for NOG.