In August, propane prices rose $.0110 per day on the average and nearly $.25 cents for the 22 trading days in the month. Thus far in September, we’ve seen prices pull back $.075 cents from start of business on September 3rd and we’ve had fewer than five trading days thus far.
I’ll always be transparent and honest so I don’t mind telling you I am a bit surprised by this. The majority of the fundamentals in the marketplace right now are bullish.
Inventories are 7.9mm below last year’s levels for the same time and under the five year average, nationally. The Mid-Con is down nearly 5mm from this time last year and nearly 4mm down from the five year average. The Gulf is just below last year’s levels and 4.7mm above the five year average. Exports remain strong as does petrochemical consumption.
The price drops were also in the face on a mostly bullish week of crude oil as those markets were stronger for the week.
Anytime you have inventor builds over a million in both the Mid-Con and the Gulf, you’ll see a bit of easing…but this feels different…almost feels like some profit taking going on. You’re going to tell me the same people that were buying hand to mouth all of August are now going to sell it to the bottom? Something just doesn’t make fundamental sense to me here.
Regardless, things are dropping from their late August highs but are still over $.15 cents higher than they were at the end of July, which were about $.15 cents higher than they were at their low in June.