EIA Data Indicates Inventory Growth Outpacing Last Year

The National Propane Gas Association (NPGA) reports that data it is monitoring from the Energy Information Administration (EIA) shows first-quarter 2018 propane exports were lower than a year earlier. But in spite of lower exports, the U.S. entered the summer months with stock levels lower than a year ago.

However, the most recent weekly data from EIA shows that the pace of inventory growth is outpacing previous years. NGPA’s Trends Report forecast is that volume growth, specifically in PADD 3, the Gulf Coast, will help the nation as a whole return to normal stock levels prior to this winter.

The association adds that propane production growth should allow days of disposition to increase at a faster pace than last year over the late summer months. But, if crude oil prices remain high, naphtha prices in Asia will move up. That results in propane gaining competitiveness as a chemical feedstock, thereby encouraging U.S. exports.

Further, if crude prices remain elevated through the remainder of the year, propane exports may be higher than currently forecast, leading to the possibility of low days of disposition again this winter. Preliminary data supplied by IHS Waterborne indicates that propane exports in the second quarter this year exceeded those of the same period last year.

(SOURCE: The Weekly Propane Newsletter, July 9, 2018)