Take a look at this graphic..the column on the left is propane inventory levels in Conway for the year 2013, then the number in red to the right of that is the difference between 2013 from the same month in 2012:
A few things jump out at me. One is the 14.3 number for end of December, 2013. That is 14.3MM barrels of inventory in Conway…if you scroll across to the right in the same row you’ll notice this is the lowest inventory level we’ve seen in Conway for this month in the five years we have listed here. It’s 4.1MM lower than December for 2008. The last three January draw downs have been in the 7MM range. We’re forecast to get some of the coldest air in recent memory this week through much of the upper Midwest.
Quite frankly, I was surprised to see prices dip the way they did this week in advance of this cold. Stocks dropped four million last month and most everything was on allocation. That will likely be the case this month, but add another 50,000/bbl per day of product leaving Conway to Mt Belvieu on the new Southern Hills pipeline this month that wasn’t there last month.
I continue to be of the belief that we’ll see the highest prices of the season later this month, in Conway. Here is a complete inventory breakdown:
In the last inventory report of 2013, propane inventories continued to decline with a draw of 1.5 million, dropping inventories to 45.9 million in the week ending 12/27/13, as reported by the Energy Information Administration. Current inventory is now 20.8 million below last year’s inventory level at this time and 8.1 million below the 5-year average of 54 million.
Midwest experienced the largest draw, falling 800,000 to 14.3 million. Midwest was down 600,000 to 25.3 million, East was flat at 3.9 million and West dropped 100,000 to 2.4 million.
Historical Averages: Mid-Con is down 8.8 million from this time last year and is down 6.6 million from the 5-year average of 20.9 million. Gulf coast inventory is 10.7 million below last year and 2.2 million below the 5-year average of 27.5 million. East Coast is down 1.2 million from last year and is 900,000 below the 5-year average of 4.8 million.
Propane imports were down 12,000 from last week to 105,000 bpd. East Coast was down 13,000 to 43,000; Midwest was flat at 49,000; Gulf remains flat at zero and West was up 2,000 to 14,000. Propane exports were flat from last week at 370,000 bpd.
Other Inventory Numbers:
Crude Down: -7.0 mm
Motor Gas Up: 0.8 mm
Distillates Up: 5.0 mm