Propane Prices Soar As Inventory Concerns Mount Ahead Of Winter

Propane Prices Soar As Inventory Concerns Mount Ahead Of Winter

Spot propane prices at Mont Belvieu, Texas, have reached their highest levels since 2014 ahead of the winter season on fears of low inventory. Energy inflation could be problematic for commercial and residential users of the fuel that heats building structures and powers vehicles, gas grills, patio heaters, generators, among many other uses. 

Propane is set up for a volatile ride this fall/winter season as supplies are about 20% below the five-year average for this time of year. The most recent U.S. Energy Department data shows inventories of around 70.8 million barrels.

The propane surge also comes from the rise in natural gas and crude prices. Propane is a byproduct of natgas production and petroleum-refining processes. About 80% of U.S. propane is a byproduct from natgas. 

At Mont Belvieu, Texas, spot propane prices are up more than 60% this year, reaching levels not seen since 2014. Energy inflation will cause headaches for the 5% of U.S. households that heavily rely on the fuel that heats their homes. 

Propane prices are coming to an inflection point in terms of seasonality. 

Taking all of this into account, one can only hope the energy crisis in Europe of low natural gas supplies and record-high prices doesn’t spread to the U.S.

Tyler Durden
Wed, 09/15/2021 – 21:20

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