The EIA reported an unusual 382-Mbbl draw in U.S. propane/propylene inventories for the week ended May 22, versus industry expectations for a 1.4-MMbbl build and the historical average increase of 1.6 MMbbl for the week. The draw was nearly 2 MMbbl below the seasonal norm and marked the largest inventory decline for the same week since our recordkeeping began in 2011, reflecting stronger-than-expected export demand. Total U.S. propane/propylene inventories now stand at 81.2 MMbbl, up 26.1 MMbbl, or 47%, versus the same week last year, 10.5 MMbbl, or 15%, above the five-year maximum, and 24 MMbbl, or 42%, above the five-year average.
PADD 3 (Gulf Coast) propane inventories posted an unusually large 1.2-MMbbl draw for the week ended May 22, bringing total regional stocks to 55 MMbbl. Despite the draw, inventories remain historically elevated at 19.7 MMbbl, or 56%, above year-ago levels, 10.4 MMbbl, or 23%, above the five-year maximum, and 20.1 MMbbl, or 57%, above the five-year average.
The decline was driven largely by strong export demand, with U.S. propane exports surging by 624 Mb/d to a record 2.63 MMb/d, well above both the four-week average of 2.21 MMb/d and the 2.15 MMb/d reported during the same week last year. The increase in exports coincides with the startup of Enterprise Neches River's flex phase II terminal last month. According to the NGL Voyager report, the facility exported 145 Mb/d of propane in May, while ethane exports were only 58 Mb/d, a far cry from the nearly 130 Mb/d peak as phase I ramped up. Strong propane exports from Gulf Coast flex terminals could continue to impact ethane shipments, as more flexible terminal capacity is focused on prioritizing LPG.
