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US Data: Propane stocks draw 2.7 million barrels on heating demand

Houston (Platts)--29 Dec 2017 547 am EST/1047 GMT


US Gulf Coast propane prices traded as high as 98.50 cents/gal Thursday morning after weekly inventory data showed a 2.7 million-barrel draw in stocks last week as Midwest heating demand increased.

December non-LST propane, reflecting barrels at the Enterprise fractionation and storage facility in Mont Belvieu, Texas, traded at 98.50 cents/gal as of 10:10 am CST, but dipped to 97.875 cents/gal by 10:45 am CST. S&P Global Platts assessed non-LST propane at 98 cents/gal on Wednesday.

Nearby Lone Star barrels were heard at a 50-point discount to non-LST. LST barrels typically hold a premium in the winter due to links to heating markets.

Energy Information Administration data released Thursday showed total US propane and propylene inventories fell 2.7 million barrels to 68.6 million barrels in the week ended December 22. That was 8% below the five-year average and 18.2 million barrels below last-year levels.

The Midwest saw the largest draw, pulling 1.5 million barrels to 22.1 million barrels, followed by the Gulf Coast, where stocks fell 531,000 barrels to 37.2 million barrels. East Coast inventories shed 441,000 barrels to 6 million barrels.

The Midwest and Northeast have seen frigid temperatures and snowfall this week and the same is expected through the weekend, according to the National Weather Service.

Output dipped 19,000 b/d to 1.89 million b/d, falling below 1.9 million b/d for the first time in four weeks, but domestic demand spiked to a 10-month high.

Product supplied, or implied demand, rose 209,000 b/d to 1.5 million b/d, a high since February 10 when demand reached 1.76 million b/d.

Exports dipped 282,000 b/d to 920,000 b/d for a four-week average of 877,250 b/d.

Market sources have reported FOB Houston propane was last done 4.75 cents/gal over Mont Belvieu product for loading in the second half of January.

Platts Analytics data showed 12 VLGCs loaded from Gulf Coast LPG export terminals last week, eight of which appeared to be crossing the Panama Canal. Two were headed for Northwest Europe and the rest to Mexico.

Weekly stocks of NGLs, excluding propane, fell 2.6 million barrels to 133.5 million barrels.

--Andrea Salazar, andrea.salazar@spglobal.com

--Edited by Derek Sands, derek.sands@spglobal.com




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