By DAN MURTAUGH
Supplies of propane and propylene in the US fell to the
lowest level for mid-November since 1999, as domestic demand
grows with exports at record levels.
Inventories dropped 2.44 million bbl to 58.4 million in the
week ended Nov. 15, according to Energy Information
Administration data. Exports have averaged 258,000 bpd this
year, up from 171,000 in 2012. Propane can be used to dry
crops during fall harvest and heat homes in the winter.
What we have here is a really strong set of
fundamentals for propane, said Peter Fasullo, a
principal at EnVantage Inc., an energy consulting firm in
Weve had a really good crop-drying season, we
have an early cold surge and we have strong exports," he
added. "Add all that together, and its presenting us
with a much tighter propane market than weve seen in a
Propane production declined by 2,000 bpd to 1.442 million,
while output reached a record level of 1.487 million during
the week of Nov. 1.
Supplies fell the most on the Gulf Coast, where most of the
US export capacity is located. Stocks dropped by 1.82 million
bbl to 31.3 million and dropped below the 10-year seasonal
average for the first time this year.
Inventories in the Midwest slipped by 296,000 to 19.5 million
bbl, the lowest level for this time of year since 1996.
Crop-drying demand in the region has been larger than normal
because of wet conditions and a record corn harvest.
Governors of India
na, Iowa, Minnesota, Montana,
Nebraska, South Dakota and Wisconsin declared states of
emergency in late October and early November to allow propane
tanker drivers to work longer hours to make extra deliveries.
Crop-drying demand was at least 400,000 to 500,000
barrels a day over a several-weeks period, Fasullo
said. That is winding down, but winter demand is
starting to come in. Thats probably going to replace a
lot of the crop-drying that occurred.