Propane stocks ended March at 54.9 MMbbl, which is 18.7 MMbbl, or 52%, above last year and 18 higher than the 5-year average. At the same time, propane exports have been screaming, with exports out of the Gulf Coast at a record-high rate in March at 1,451 Mb/d, 149 Mb/d more than March 2022. Total U.S. propane exports were up 35% over 2022. All those barrels must be coming from somewhere. But if you look at EIA weekly production numbers, Q1 2023 is almost exactly equal to Q1 2022 (2,390 Mb/d vs 2,380 Mb/d, respectively). And so far this year, EIA weekly propane production numbers are flatter than a pancake, with EIA data in a very tight range (+/- 40 Mb/d). Where are the mystery barrels going into inventories and exports coming from? Could EIA weekly propane production be understated?
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Now You See It, Now You Don't - Is Propane Production Increasing or Decreasing?
Understanding whether propane production is up or down over the past few months is a bit more difficult than you might think, depending on which set of EIA numbers you choose to look at. The U.S. Energy Information Administration provides monthly numbers on the last day of the month lagged by about two months, and weekly numbers on Wednesdays, lagged by only five days. Both time series are closely watched by the propane market to assess the availability of supply for retail customers, petrochemical feedstock demand, and exports. Usually, these two sets of numbers move in tandem. But not always. The monthly numbers show production down by about 70 Mb/d from April to June, which is what you would expect given what was happening with crude and gas production at that point in time. Yet EIA weekly production numbers showed production increasing by about 90 Mb/d for the same period. So which way is propane production really trending? If you want to understand what’s going on, and you don’t mind delving into some deeply wonky NGL analytics, hang on for today’s blog.
What's Your Name - Explaining the EIA's Huge Unaccounted Crude Oil Imbalances
The numbers don’t add up. Literally. The most closely watched energy statistics in the world have a problem, and it’s been getting worse over the past two years. We’re talking about EIA’s U.S. crude oil supply, demand and inventory balances, which are published each week and then trued up about 60 days later in monthly data. The problem is that the balances don’t balance. EIA uses a plug number alternatively called “adjustment” or “unaccounted for” to force supply and demand to equate. That would not be an issue if the plug number was small and flipped frequently from positive to negative, likely due to timing inconsistencies with the input data. But that’s not the case. The number is mostly positive, meaning more demand than supply. And the difference can be mammoth: last week it was 2.3 MMb/d, or 18.4% of U.S. crude production. It seems like barrels are somehow materializing out of nowhere. But now we know where, because EIA just finished a 90-day study of the crude imbalance that reveals the sources of the problem and what it is going to take to fix it. In today’s RBN blog, we will delve into what has been causing the problem, what it means for interpreting EIA statistics, and what EIA is doing to address the issues.
It's a Mystery - Why Did Propane Production Sag, and When Is It Coming Back?
U.S. propane stocks are high, 33% over the 5-year average. Year-to-date propane exports are at a robust 1.6 MMb/d, well above the 1.4 MMb/d shipped out in 2022. Increasing propane production must be driving the growth in inventories and exports, right? Nay! Propane production is actually down, falling 9% from September 2022 to December, and even with meager growth this year is still 3% below the September high. So where are the propane export and inventory barrels coming from? And what does this mystery reveal about the trajectory of propane production over the next year or two? In today’s RBN blog, we do some sleuthing and come up with some answers.
