Propane inventories increased by 2.7 million this week for a current total of 64.7 million, as reported by the Energy Information Administration as of 4/24/15. Inventory is 33.2 million above 2014’s inventory level at this time and 22.1 million above the 5-year average of 42.6 million.
Builds on All Regional Inventories: Midwest up 900,000 to 18.3 million; Gulf up 1.2 million to 41.3 million; East up 400,000 to 2.7 million; and West up 100,000 to 2.4 million.
Historical Averages: Midwest is 7.7 million above last year’s inventory level and is up 4.2 million from the 5-year average of 14.1 million. Gulf Coast inventory is 24.1 million above last year and 16.7 million above the 5-year average of 24.6 million. East Coast is up 100,000 from last year and is up 300,000 from the 5-year average of 2.4 million.
Propane imports were up 45,000 bpd to 111,000 bpd. East Coast was up 3,000 to 30,000; Midwest was up 41,000 to 74,000; Gulf was flat at zero bpd and West was up 1,000 to 7,000. Propane exports were down 7,000 to 470,000 bpd.
Other Inventory Numbers:
Crude Up: +1.9 mm to 1,181.9
Motor Gas Up: +1.7 mm to 227.5
Distillates Down: -0.1 mm to 129.3
The crude number is interesting when you dive in a bit deeper…we saw the first inventory draw at the Cushing, OK storage hub in nearly a half-year. Thus, WTI crude futures closed up $1.52 at $58.58 a barrel, after hitting a 2015 high of $59.33.
Propane prices moved a bit, despite another considerable build in inventories. As mentioned above, the US now sits at 64.7MMBB of propane inventory with one more April report still to come…and exports were off a bit to 470,000bpd.
I made a friendly wager with a coworker just three weeks back that crude would see the mid $40’s before it saw $60/bbl…and the time frame was the rest of 2015. I about had to buy him lunch before the month was out…which he figured would have been worth two lunches for a wager flaming out so horribly and quick.
We’ve been seeing a lot of prebuy activity at NGL, as people are stepping in and covering themselves at least 25% of the way for their winter needs. Some folks in the Midwest are 50% covered or more, while the percentage in the Southeast is lower, which is typically the case.
Oil and Nat Gas mogul T. Boone Pickens said again today he sees crude at $70/bbl by the end of the year. Here is the big takeaway from this link:
“I don’t think Texas will fall into a recession. Oil will recover in price.” Pickens said. Even though inventories are sitting at record highs, Pickens is standing by his call for oil to rise to $70 a barrel by the end of the year before rising to $90 to $100 in the next 12 to 18 months. Oil prices are currently at $57, up substantially from $45 earlier in the year.
What makes him so confident? “I know more about it than they do. It’s that simple,” he said.
That deserves an ‘LOL’.