It may be hard to believe, given the furnace-like temperatures that many of us have been dealing with the past few weeks, but the 2023-24 propane heating season is on the horizon — its official start is October 1, only seven weeks away. To quote Bill and Ted from their Excellent Adventure movie franchise, it could be argued that, for the U.S. propane market, “The best place to be is here. The best time to be is now.” Production is at or near an all-time high — so are exports. Propane inventories are well above their five-year average, which should help ward off winter-supply concerns. And propane prices? They’re up from where they were a few weeks ago, but only in the 70-cents/gal range, well below the $1/gal-plus levels that were the norm between Q3 2021 and Q3 2022. The temptation may be to yell, “Party on, dudes!”, but as we discuss in today’s RBN blog, the reality is, the propane market is an ongoing and unpredictable adventure, and you never know for sure what’s ahead.
(You might be thinking, “Wait, the title of the blog says Bill and Todd, not Bill and Ted.” Well, this blog is based in part on RBN’s recent webcast, which included presentations by Bill Marks, director of supply strategy & risk management for AmeriGas, and Todd Root, director of NGLs and petrochemicals at RBN. To see a replay, click here.)
So, where do things stand in the U.S. propane market? Well, according to stats released by the Energy Information Administration (EIA) on July 31, propane gas plant production hit an all-time high in May: 1,979 Mb/d (right end of blue line in left graph in Figure 1), a mark that was 19 Mb/d higher than the previous record set last September and 136 Mb/d (7%) higher than the production level in May 2022. RBN’s forecast (dashed gold line in left graph) shows propane production surpassing 2,000 Mb/d this summer and averaging just under the 2,000-Mb/d mark for 2023 as a whole (red line to right in left graph) — up from about 1,850 Mb/d last year (red line to left).
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