US propane stocks seen up 2mn bl: survey

OREANDA-NEWS. May 13, 2015. The Energy Information Administration (EIA) is expected to report a 2mn bl build in US propane inventories tomorrow for the week ended 8 May, according to an Argus survey.

The 21 market participants surveyed anticipated a build in propane stocks ranging from 1.2mn bl to 3.1mn bl, with most expectations falling between 2.1mn bl to 2.5mn bl.

Propane inventories rose by a smaller-than-expected 1.849mn bl to stand at 66.516mn bl for the last week of April. Some participants were caught off-guard by the smaller 99,000 bl build reported in PADD II, which was in part explained by larger propane volumes being shipped south to Mont Belvieu, Texas, as the inter-hub arbitrage opened.

US exports slowed last week, several market participants told Argus, and inventories were met with weak petrochemical demand and higher production values; these factors combined could result in a large build.

Other participants held the contrary opinion that lower propane prices relative to WTI may have driven buying demand, and, therefore, smaller inventory build for last week. Propane prices hit five-month lows relative to WTI at both the Gulf coast and midcontinent hubs.

Spot propane prices at Mont Belvieu strengthened today, gaining alongside the crude market despite market participants expectations of a large build in stockpiles tomorrow.

LST propane firmed 1.5? from its open, to 51.75?/USG, while EPC propane closed out the session sold at 50.875?/USG.

At the Conway, Kansas, hubs, propane saw heavy trading on Tuesday, and price firmed alongside WTI. Conway propane firmed from a low of 42.75?/USG, done shortly after market open, to 44.5?/USG in the mid-afternoon.