US propane stocks fall 3.4mn bl

OREANDA-NEWS. December 10, 2015. US propane inventories fell by 3.445mn bl the week ended 4 December, according to the Energy Information Administration (EIA).

The sharp decline, which was well above market expectations, brings total US inventories to 100.658mn bl, still 21.499mn bl higher than last year and 54.16pc higher than the five-year average. Market participants surveyed Tuesday expected anywhere from a 1.5mn bl draw to a 500,000 bl build. The US propane market remains long, however, amid brisk production and seasonally weak domestic demand.

The largest draws came from the US Gulf coast, where exports led to a 2.429mn bl decline in stocks. In the midcontinent, inventories fell 748,000 bl. The East coast saw inventories decline by 265,000 bl and PADD 4 and PADD 5 saw a combined draw of only 3,000 bl.

Market participants weighing the data, which has varied sharply during the past three weeks, showing 2.1mn bl decline at the end of November but a 495,000 bl build the week before, suggested another correction in data reporting could partly account for the sudden large decrease in stocks, as weather throughout much of the US has been mild and exports steady.

LST propane prices at Mont Belvieu, Texas, rose following the data, climbing to 41.125?/USG after the EIA release. EPC propane opened 0.125? higher at 40.125?/USG and rose to 40.625?/USG following the report.

Conway, Kansas, propane saw active trading following the draw. It traded early on Wednesday at a slightly higher 34?/USG and then traded briskly following the release of EIA data, climbing to 35.5?/USG.

Propylene at bulk terminals declined 129,000 bl to stand at 2.962mn bl, while US propane/propylene supplied to end users rose by 245,000 b/d to 1.543mn b/d.