Propane inventories continue their seasonal rise, building 1.9 million this week for a current national total of 80.7 million, as reported by the Energy Information Administration as of 6/12/15. Inventory is still well above average at 29.5 million above 2014’s inventory level at this time and 24.3 million above the 5-year average of 56.4 million.
Regional Inventories: Midwest up 900,000 to 21.6 million; Gulf up 1 million to 51.2 million; East down 100,000 to 5 million; and West flat at 2.8 million.
Historical Averages: Midwest is 5 million above last year’s inventory level and is 2.4 million above the 5-year average of 19.2 million. Gulf Coast inventory is 22.5 million above last year and 20.4 million above the 5-year average of 30.8 million. East Coast is up 1.2 million from last year and is up 800,000 from the 5-year average of 4.2 million.
Propane imports were flat at 101,000 bpd. East Coast up 1,000 to 25,000; Midwest up 3,000 to 66,000; Gulf was flat at zero bpd and West down 4,000 to 10,000. Propane exports were flat from the last 3 weeks at 449,000 bpd.
Other Inventory Numbers:
Crude Down: -2.1 mm to 1,160.9
Motor Gas Up: +0.5 mm to 217.8
Distillates Up: +0.1 mm to 133.6
THE ANALYSIS: Let’s begin with Crude, because it continues to drive the propane markets. The draw downs were expected, but the build in gasoline stocks was not, nor was the build in crude stockpiles in Cushing, OK, the largest crude storage center in the United States.
“…stockpiles at the Nymex futures delivery hub of Cushing, Okla. climbed by more than 100,000 barrels.The biggest surprise of the data release is a build in Cushing,” said John Macaluso, an analyst at Tyche Capital Advisors. “A build in Cushing could be a telling sign of the end of a run of consecutive draws in inventories.”
We’ll see what next week’s report shows, but if there is another Cushing build, we could see more softening in crude and thus, propane. Crude prices are close to even on the day right now, hovering near $60/bbl.
Gulf fed propane prices are off a few cents while Conway fed propane prices are near where they finished yesterday.