On December 29, 2023, EIA released a new and long-awaited propane data series titled “Propane, fractionated and ready for sale” in the Petroleum Supply Monthly (PSM). This data splits PADD level propane inventories into two buckets – propane contained in Y-grade mix awaiting fractionation, and purity propane ready for sale, starting with data from September 2023.
For decades going back to the 1970s, propane inventories reported by the EIA combined both buckets into a single number. Since propane in Y-grade cannot be used directly, there was always a concern that propane inventories were effectively overstated by some unknown amount, creating a risk that the industry might not have enough on hand in case of a severe cold weather event.
The latest monthly propane inventory data came available on March 29, 2024, providing five months of history and for the first time, inventories nearing the end of heating season (January 2024). The graph below shows total U.S. inventories (blue line) and the percentage of that inventory in Y-grade (green line).
The numbers are behaving as expected. As inventories fall due to winter season demand (now down to 60 MMbbl), it is purity barrels that are taking the biggest hit as volumes move to end-use markets. That means the percentage of Y-Grade inventories is increasing, now up to 40% for the U.S., and higher in PADD 3 Gulf Coast (46%) and PADD 4 Rockies (67%). Most likely the percentage of Y-grade will continue to increase until the end of the heating season (March 2024) before purity propane inventories start to consistently buildagain.
