The EIA reported a 111-Mbbl draw in total U.S. propane/propylene inventories for the week ended October 23, the fourth draw in a row. Stocks fell to 105.7 MMbbl (red line in the first chart below), just 54 Mbbl above the same week last year (blue line) but still 11.3 MMbbl, or 12%, above the five-year average (green line). Stocks have fallen 3.9 MMbbl over the past four weeks, while over the same four weeks last year they rose 2.3 MMbbl. The surplus to last year has shrunk in six of the past seven weeks, from 12.8 MMbbl in the week ended September 4, when stocks hit a record 110.5 MMbbl, to 2.7 MMbbl a week ago and just 54 Mbbl this week (second chart below). The cushion is now all but gone.
Exports are the main reason. Since early September, U.S. exports have averaged 2.15 MMb/d, about 230 Mb/d more than the same period last year. The four-week average (red dashed line in the exports chart below) has stayed above last year’s (blue dashed line) every week since July, and weekly exports have topped the previous five-year range (gray area) in six of the past eight weeks. The extra exports add up to about 11 MMbbl over seven weeks, nearly the entire surplus. Stocks could fall below last year’s level as soon as next week. That leaves less room for error heading into heating season, especially in the Midwest, where stocks are already 11% below last year.
