OREANDA-NEWS.  US propane inventories rose by a larger than expected 2.414mn bl for the week that ended 7 August, according to the Energy Information Administration (EIA).

Market observer surveyed by Argus called for an average build of 1.09mn bl, with the highest forecasts standing at 1.8mn bl.

At 92.792mn bl, US inventories stand about 50.53pc above the five-year average and 22.492mn bl above where inventories stood during the same period last year.

The US Gulf coast accounted for the majority of the build, climbing by 2.457mn bl to stand at 59.035mn bl. The larger build was likely driven by a slowdown in export movements, coupled with more volumes of the product moving to Mont Belvieu, Texas, storage facilities from the midcontinent hub.

Last week, Conway, Kansas, propane stood at about a 5.463? discount to EPC propane and at about a 5.7? discount to LST barrels. Traders were heard in the market taking advantage of the open arbitrage.

Midcontinent stockpiles fell by 44,000 bl last week, to 26.079mn bl as a result of more volumes moving out of PADD II.

US spot propane prices feel after the release of the EIA's inventory report. At Mont Belvieu, Texas, LST propane prices fell 0.25? immediately following the release of the data, to 37.25?/USG, and continued to fall to 36.75?/USG in thin trade.

At the EPC terminal, propane activity was even less liquid, but prices fell to 36.75?/USG, down 0.75? from where prices stood ahead of the inventory report.

Conway propane reached an early high of 34?/USG but prices fell slightly, to 33.625?/USG, despite news of the inventory draw.

Along the east coast, propane inventories fell by 154,000 bl to 4.270mn bl, and in the west coast and Rocky Mountains regions stockpiles rose by 154,000 bl to 3.407mn bl.

US propylene at bulk terminals fell by 118,000 bl to 4.680mn, while propane/propylene supplied to end-users fell by 198,000 b/d to 857,000 b/d.

Other NGL and olefin stocks, excluding propane and propylene, rose to 120.7mn bl.