OREANDA-NEWS. November 17, 2016. Last week's unusual build in US propane inventories is being pinned on slower exports, according to market participants.

Propane inventories increased by 1.23mn bl for the week ended 11 November, much higher than the 500,000 bl to a 1.8mn bl draw predicted by 12 market participants surveyed by Argus. The Energy Information Administration (EIA) reported today the US exported 605,000 b/d of propane the week ended 11 November, down sharply from the 845,000 b/d shipped the prior week and the slowest pace seen since the last week of September, when at least two shipments were cancelled.

During the first half of October, when most term lifters would decide where to fix November cargoes, the US arbitrage to Asia on a spot fob basis averaged \\$76/t, down from \\$77.5/t on average in late September. The arbitrage to Europe averaged \\$48.6/t during the same period, down from \\$50.8/t in the second half of the prior month.

Spot fob discussions during that time hovered between Mont Belvieu +4.5?/USG to +5.25?/USG, at or just above cancellation economics for some term lifters. This resulted in weaker demand for additional cargoes and possibly in delayed loadings.

Currently the pace of exports for December appears stronger, however, as low US pricing widens arbitrage opportunities both in Asia and Europe. By midday US in-well propane prices stood at a roughly \\$90/t discount to Asia and at a \\$71/t discount to Europe.