More Up and Down for Spot Propane Markets

Spot propane at the nation’s two major trading hubs Thursday shed the fractional gains seen Monday to shift into an up-and-down pattern for the week. Just prior to the Energy Information Administration (EIA) releasing its inventory report, delayed a day because of the Tuesday Veterans Day holiday, Mont Belvieu spots showed losses of 3.25 to 3.5 cents compared to early in the week, while Conway was down a more moderate 2.25 cents. The declines uncharacteristically accompanied winter weather moving into many regions.

Although market watchers are calling for propane prices to soon be pushed higher as weather forecasters call for continued below-normal temperatures in the latter half of November, the mid-month scenario had spot values falling a nickel and more early in November, rise by just fractions, then dip again. Added to the mix was a surprising increase for the nation’s propane inventories, with EIA reporting a 0.9-MMbbl gain for the week ended Nov. 7, a build that hadn’t been expected by analysts who foresaw a draw. Equally unexpected was the miniscule 0.1-MMbbl dip in stocks a week earlier, right in the middle of crop drying season. For now, absent weeks of winter-like weather, propane is following the energy commodity complex deep into negative territory, a freefall that had NYMEX crude oil futures trading at a three-year low of $75.14/bbl Thursday.

Mont Belvieu non-LST spot propane mid-morning Thursday stood at 80.50-81.00 cents/gal., down 3.25 cents for buyers and 3.625 cents for sellers compared to the Monday email Update. Low and high trades were reported at 80.00 and 82.875 cents. LST spots, even at that same 80.50-81.00 cents/gal., were lower by 3.5 cents for buyers and 3.75 cents for sellers. Low and high deals were posted at 81.00 and 83.00 cents.

The Group 140 (Conway) bid and offer was at 88.75-89.625 cents/gal., off 2.25 cents for buyers and 2.375 cents for sellers compared to Monday. Low and high trades were reported at 88.75 and 92.00 cents.

On the Canadian side, Edmonton spots late in the week had both gained and narrowed, rising 3 cents for buyers but shedding 0.5 cents for sellers to stand at 66.25-67.00 cents/gal. Sarnia spots, at 99.50-100.00 cents/gal., gave up a steep 6 cents for buyers and 6.25 cents for sellers over the week.

Inventory. EIA reported Nov. 13 that U.S. propane inventories showed a 0.9-MMbbl increase for the week ended Nov. 7. The Gulf Coast had a 0.6-MMbbl gain, while the East Coast added 0.1 MMbbl and the Rocky Mountain/West Coast region 0.4 MMbbl. The Midwest had a draw of 0.2 MMbbl. Stocks stood at 81.1 MMbbl as of that reporting period.