INVENTORIES: Propane added 2.4M/bbls to inventory levels this past week, according to the EIA. That moves national stockpiles to 63.6M/bbls, or 1.4M/bbls over last year’s level at the same time. Exports were similar to last week. Here is how things look now (left side) as well as compared to last year (right side).
I am not sensing any inventory concerns in the propane trade at this point in time. There are 12 more reporting weeks that takes us through the end of September EIA reports. If we average 2.5M/bbls of builds per week during that time, we will begin October with nearly 94M/bbls of inventory. If we average 2.0M/bbls of builds per week during that time, we will begin October with nearly 88M/bbls of inventory. We entered October of 2017 just shy of 80M/bbls, so as you can see, there really shouldn’t be any concerns with propane inventories and fundamentals at this time.
That’s not to say that export activity couldn’t pick up the rest of the summer, and many analysts are expecting just that. Asian propane clients are sitting on low inventory levels right now and the industry believes they are not in a hurry to add to those levels with Mt Belvieu prices where they are, and instead will wait until later in the year to load up.
Here is a look at the trajectory of spot (at the trading hubs) propane prices since the beginning of June (top) and propane’s relationship to WTI crude oil at the respective trading hubs (bottom)
HEADLINE VOLATILITY: As I wrote to Propane Buzz subscribers yesterday, there is an incredible level of headline risk or headline volatility in crude oil right now. Yesterday afternoon, I could scarcely find a bearish headline related to crude oil…and I was looking for them just to see if they were out there. When I woke up this morning, there were bears all over the place. Here is a headline collage I put together and sent out this morning to subscribers:
Traders love and need volatility…that is the environment where they make their profits. Propane retailers would prefer a less volatile environment, but we are caught up in the crude storm…which is why cost averaging your propane purchases for winter contracting is so very crucial. I have had a dozen or so conversations with Propane Buzz clients over the past two days and we have gone over this strategy, as well as others.
I spend 15 minutes in today’s EIA Wednesday video discussing this strategy and why it’ so important right now, so please watch it if you have the time…and when it comes to generating margin for your businesses, 15 minutes is hardly a great expense. (scroll down below the video for information related to a seven-day free trial of Propane Buzz)
PROPANE BUZZ FREE TRIAL: Today, we launch a free-trial opportunity at PropaneBuzz.com. We will not ask you for any payment information at all. Just your name, phone number, company you are affiliated with and your email address. I am asking that your email address be a company email address, as this will help me to limit abuse of the free trial. I will be approving these trials manually, but more than likely I can activate your seven-day free trial shortly after you submit the request.
This will give you one week’s access to everything we have been producing since launching our subscription offering on June 25th, and everything we will produce for the subsequent seven days. There is zero risk for you with this offering and it gives you a great opportunity to look under the hood at what you have been missing if you have yet to subscribe…and you won’t have to remember to cancel the subscription if you are not interested before you get charged, because again, we’re not even collecting your payment information. We’re confident that you will see great value in what we are doing for our clients and you will want to come on board and allow us to help you add more profits to your bottom line.
Here are links to some of the items we have produced for subscribers since June 25th…once you have signed up for your free trial, come back to this list and click on the items that pique your interest. Thanks for reading and watching!
ANALYSIS & COMMENTARY ITEMS
June Soared on 6/22, But Not Entirely Due to OPEC (6/25)
Markets Still Seeking Footing, Trade War Risk Present (6/26)
Breaking Buzz: Crude Oil Soars on Iran Talk (6/26)
Propane Continues to Rise Despite Bearish Fundamentals (6/28)
Propane Buzz Report for June 29th
Morning Market Report for July 2nd
Trying to Make Sense of Propane in Crude Minefield (7/2)
Propane Stops Rising…For Now (7/3)
PBR: Marcellus/Utica Supply Changes Coming? Impact to Conway/MTB Differential? (7/5)
Morning Markets for July 6th
PBR: Trade War, Oil Fears and More (7/6)
Monday Markets and News from the Weekend (7/9)
Market Briefing for July 10th
Crude Reality: Propane May Struggle to Pull Back (7/10)
Closing Numbers: Propane & Crude Oil Close Higher (7/10)
TODAY’S BAM FORECAST
BAM Weather Update for June 25th
BAM Weather Update for June 26th
BAM Weather Update for June 27th
BAM Weather Update for June 28th
BAM Weather Update for June 29th
BAM Weather Update for July 2nd
BAM Weather Update for July 3rd
BAM Weather Update for July 5th
BAM Weather Update for July 6th
BAM Weather Update for July 9th
BAM Weather Update for July 10th