US propane stocks fall by 1.683mn bl
The decline, which was in the range of market expectations, brings total US inventories to 98.975mn bl, 20.587mn bl higher than last year and 55.66pc higher than the five-year average. Market participants' expectations ranged from a 1.7mn bl draw to a 650,000 bl build. The US propane market remains long, though this report marks the first inventory level below 100mn bl since the end of September.
The largest draws came from the US midcontinent, where retail demand led to a 733,000 bl decline in stocks. At the Gulf coast, inventories fell 368,000 bl. The East coast saw inventories decline by 357,000 bl and PADD 4 and PADD 5 saw a combined draw of 225,000 bl.
Market participants had expected a draw because of export demand at the Gulf coast, but midcontinent seasonal demand was the larger factor as colder weather arrived. The US faces another winter storm which has blanketed the northern plains in up to two feet of snow. One propane retailer noted that local propane supplies are being absorbed quickly, requiring long-haul trucks to travel from the midcontinent to Idaho and Oregon to supplement supplies.
Spot propane prices at Mont Belvieu, Texas, fell following the draw as crude trended lower. LST propane opened at 35.25?/USG, down 1.5? from yesterday, and fell to 34.5?/USG. Following the EIA report, it pared losses to 35?/USG.
EPC propane also opened 1.25? lower at 34.75?/USG and declined following the report to 34?/USG.
Conway, Kansas, propane saw active trading prior to the draw. It opened at 29.5?/USG, 0.875? lower than the previous session, and then trended downward to as low as 28.5?/USG.
Propylene at bulk terminals increased 227,000 bl to stand at 3.189mn bl, while US propane/propylene supplied to end users decreased by 218,000 b/d to 1.325mn b/d.
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