On April 5, the EIA reported that U.S. propane inventories for the week ending March 31 declined by only 535 Mbbl compared to industry expectations for a draw of 900 Mbbl. Once again exports were the primary factor driving stock changes. Propane exports for the week came in at 1,314 Mbbl/d, down a whooping 488 Mbbl/d from the previous week and well below the four-week average of 1,669 MMbbl/d. For the two prior weeks, ending March 17 and 24, propane inventory draws were much higher than market expectations as exports soared to record-highs. However, total U.S. propane inventories remain healthy as we enter the storage injection season with stocks at 55.7 MMbbl which is 21.3 MMbbl, or 62%, above the same week in 2022 and 13.1 MMbbl, or 31%, above the 5-year average.
Featured Articles
One Day Is Fine and the Next Is Black - Stock Levels Whipsaw the Propane Market, Part 2
During the spring, summer and fall of 2016, U.S. propane inventories grew much more slowly than they did in the same period in 2014 and 2015, in part due to fast-rising exports. The situation isn’t dire––propane stock levels are relatively high as the winter of 2016-17 really kicks in, largely because last winter was a mild one that left inventories in good shape when the 2016 stock-building period started. But even-higher exports and the possibility of a “real” winter this time around raise the specter of an especially big drop in stored volumes over the next three months. Today we assess what the combination of higher exports and even an average winter could mean for propane inventories.
One Piece at a Time - U.S. Crude Oil Supply/Demand Balances, Inventories and Pricing
Last week, crude oil prices dropped below $50/bbl, in part due to continued increases in U.S. crude oil inventories, and fell further over the next few days. Then yesterday, prices perked up by $1.14 to $48.86/bbl; again one of the factors was the weekly inventory number from the Energy Information Administration which showed inventories down by a fraction of a percentage point for the week. The market seems to react spontaneously to changes in that crude-stocks statistic. Up is bearish, down is bullish. These days even a very modest decline in inventories is bullish. But serious analysis requires a more detailed, more nuanced understanding of why crude oil inventories behave as they do. Were inventories driven up by higher production or lower refinery runs? By higher imports? By lower exports? The reasons behind the inventory change are more important than the change itself. Today we continue our series on the modeling of U.S. crude oil supply and demand, and the sourcing of input data used in those calculations.
