Propane inventories drew 5.2M/bbls for the week ending February 19th, 2021 and now stand at 43.5M/bbls. This puts the current inventory level at a nearly identical pace to that of the 2017-2018 season, which saw national inventories at 43.3M/bbls for the same week of the year, which is the lowest inventory level for this time of year in at least the past seven years, with next week’s EIA’s likely to show another considerable drawdown.
The image on the right shows the incredible drop off in propane production, which we expected to see given the refinery shut ins due to last week’s record breaking cold in Texas and in Kansas.
Exports were just above 1.3M/bpd, but the number that seems to be an outlier is the domestic demand tally that was shown to be just 951,000/bpd. This was down from the previous week’s 1.869M/bpd despite incredible cold. One possible explanation is that this week’s domestic demand number did not account for the incredible lifting activity off-hub, so the numbers were not represented in this week’s total and could come in next week. There were significant pipeline related issues last week, especially surrounding Conway. Take a look at this next chart, which shows PADDII at 9.8M/bbls, and that is the Midwest’s total. Actual volumes in storage at Conway are much lower, which will be revealed by the EIA later today and something we will discuss at greater length in tomorrow’s Propane Buzzcast.
The next chart shows you the seven-year national propane inventory trajectory, and the darker blue line is this current propane season. We have drawn down 58.3M/bbls of inventory since the first week of October, which has this year’s winter season ahead of the record drawdown pace of 2016-2017.
The two charts below show the eight-year regional drawdown trajectory, with PADD II on the left and PADD II (Gulf) on the right. The PADD II, or Midwest levels, are only surpassed by the 2013-2014 season.
But again, as we have been discussing for weeks, this year’s PADD II surplus exists in Michigan, not in actual Conway…we will dissect this more with updated numbers tomorrow, but the chart on the right, from two weeks ago, show Kansas specific inventories at perilously low levels.