Propane prices are going up

[dan_s]

This is a bit of good news for our gassers, especially Antero Resources (AR).

Trading Economics
"Propane prices at the Mont Belvieu distribution hub in Texas rose above $0.8 per gallon ($33.60/bbl), their highest in nearly eight months, driven by expectations of increased demand, as frigid Arctic air mass was sweeping from the Northwest Territories down to Texas and the Southeast. Low temperatures boost the need for propane as a household heating source. Additionally, the commodity remains underpinned by decreased supply after the latest EIA data showed US propane inventories dropped to 79.1 million barrels on the week to January 5th from 82.6 million barrels on the week to December 29th and were only slightly above 78.6 million barrels in the same period year earlier."

You may have heard that El Nino winters are mild in North America. This year we have a Super El Nino, which make weather forecasting difficult because they speed up the jet stream and generate strong winter storms. Another big storm hitting the West Coast this weekend. Super El Nino's + a Stratosphere Warming Event setting up another Polar Vortex could make February colder than normal.

The current weather forecast remains bullish for propane prices because lots of homes use propane for space heating in the upper midwest.