Below you’ll see my synopsis on inventories for this week…a few thoughts first
-I still think last week’s build of 800K in the Midwest is a joke and either a fabrication or an error in reporting. Always will. Had there been draws as expected last week I think Conway would have exploded again
-The Gulf is now starting to pare down its inventory….under 16 million barrels through basically the first week of February and they are ‘exporting’ barrels north to Conway….we’re going to see the Gulf’s inventory get down to record low numbers at the end of this winter if that keeps up AND Conway inventories are near record lows for this time of year.
-On the whole, United States propane stocks are at 27.9MM. That number is 24.5MM BELOW LAST YEAR AT THE SAME TIME and 9.6MM below the five year average of 40MM
Those national numbers are simply staggering. Staggering. Once this month is over, if things keep up like this, we’ll be at levels lower than any time in the last decade, nationally.
Will we be able to build back to acceptable levels? Will the low stocks hang over our heads all spring and summer and therefore be in the pricing of next year’s gas?
I continue to say this in these emails, but given where pricing is for next fall and winter right now, I think these numbers are going to be good numbers…just as I was advising last May and June that the numbers at that time would be winners come this winter. This industry has shown an ability to build back quickly in the past and if prices are real strong early, fewer cargoes will ship overseas as the arb spreads will fall apart. But there are millions of barrels per month which are already contracted and will leave the United States on a monthly basis regardless of prices.
I think prices look very good right now for the fall and winter.
Propane inventories continued to fall with a draw of 2.9 million to 27.9 million in the week ending 2/7/14, as reported by the Energy Information Administration. Current inventory is now 24.5 million below last year’s inventory level at this time and 9.6 million below the 5-year average of 40 million.
Gulf had the largest draw of 2.1 million, taking inventory to 15.6 million; Midwest fell 600,000 to 9 million, mostly erasing last week’s gain of 800,000; East was down another 200,000 to 2 million and West fell 100,000 to 1.4 million.
Historical Averages: Mid-Con is down 5.9 million from this time last year and is down 5.2 million from the 5-year average of 14.2 million. Gulf coast inventory is 18.4 million below last year and 5.1 million below the 5-year average of 20.7 million. East Coast is down 600,000 from last year and is 900,000 below the 5-year average of 2.9 million.
Propane imports were up 52,000 from last week to 211,000 bpd. East Coast grew 12,000 bpd to 88,000; Midwest was up 49,000 to 112,000; Gulf remains flat at zero and West was down 9,000 to 11,000. Propane exports were flat again this week at 376,000 bpd.
Other Inventory Numbers:
Crude Up: 3.3 mm
Motor Gas Down: -1.9 mm
Distillates Down: -0.7 mm