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.
As we said last time, in Part 1 of this series, here in the RBN blogosphere we pay a lot of attention to natural gas liquids (NGL) markets in general, and the propane market in particular. In Sail Away, we discussed the growing supply of propane, falling prices and increasing export volumes, while we examined the impact weather has on propane markets in A Perfect Storm, and how prices impact propane as a petrochemical feedstock in Beyond Hypothermia. We prepared a comprehensive study for the Propane Education and Research Council (PERC) to assess how propane market developments could impact the prospects for disruptions similar to those that occurred during the “Perfect Storm” winter of 2013-14, a summary of which was published in our Drill Down Report: Next To You and an extensive blog series including Can’t Get Next To You. We’ve also covered the impact falling crude prices are having on NGL markets, including propane supply and demand, pricing, infrastructure and petrochemical margins in our Drill Down Report: It's Not Supposed To Be That Way (Part 1) and (Part 2) and a blog series that included Developing NGL Supply/Demand And Price Scenarios.
Visualize the infrastructure behind U.S. NGL movement.
The U.S. NGLs Map provides a comprehensive view of the transport, processing, and export networks moving NGLs across the U.S.
In Part 1 of this blog series, we examined the reasons behind why U.S. propane inventories rose by an impressive 55 million and 53 million barrels (MMbbl) during the spring/summer/fall of 2014 and 2015, respectively. The reasons for the big inventory builds were these: growing production, weak demand, and exports not keeping up with the resulting surplus.
Now on to what changed from 2015 to 2016. The bottom line was a much smaller 41 MMbbl build from the week ending March 18, 2016 (when stocks started building) to the week ending September 30, 2016 (after which stocks began to draw). In 2015, propane supply averaged 1,827 Mb/d during the build period, while in 2016 supply averaged 1,864 Mb/d––a 37-Mb/d increase. Energy Information Administration’s (EIA’s) “Product supplied,” or implied domestic demand, averaged 1,032 Mb/d in 2015 but dropped to 962 Mb/d in 2016––a 70-Mb/d reduction. So production was 37 Mb/d higher and domestic demand was 70 Mb/d lower during the 2016 build period, or in total a 107-Mb/d difference toward a larger build occurring during 2016.
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About the song
“Should I Stay or Should I Go” was written by Topper Headon, Mick Jones, Paul Simonon and Joe Strummer, and appears as the third track on side one of The Clash’s fifth studio album, Combat Rock. It was originally released as a single in May 1982, where it went to #45 on the Billboard Hot 100 Singles chart. After being featured in a Levi’s jean television commercial, the song was re-released in February 1991 and went to #1 on the U.K. singles chart and made the Top 10 on several European charts. The song borrowed heavily from the 1960s Righteous Brothers hit, “Little Latin Lupe Lu,” and featured the lead vocals of Mick Jones. The lyrics were rumored to have been written about Jones’s relationship with singer Ellen Foley. Personnel on the record were: Mick Jones (guitar, lead vocals), Joe Strummer (guitar, backing vocals), Paul Simonon (bass, backing vocals), Topper Headon (drums) and Joe Ely (backing vocals).
Combat Rock was recorded between September 1981 and April 1982 at Electric Lady Studios in New York City, Ear Studios in London, and Warnford Studio in Hampshire, England. Produced by The Clash with Glyn Johns, the album was released in May 1982. It went to #7 on the Billboard Top 200 Albums chart and has been certified 2X Platinum by the Recording Industry Association of America. Three singles were released from the LP.
The Clash was an English punk rock band formed in London in 1976 by Joe Strummer, Mick Jones, Paul Simonon and Topper Headon. Headon left the band in 1982 and Jones in 1983. The group continued with new members, but officially broke up in 1986. Ten members passed through The Clash after its inception. They released six studio albums, two live albums, nine compilation albums, two EPs, and 31 singles. The band was inducted into the Rock and Roll Hall of Fame in March 2003. Joe Strummer went on to form various solo projects, Mick Jones formed Big Audio Dynamite, and Paul Simonon formed Havana 3AM. Joe Strummer died in December 2002. In 2007, director Julien Temple released the Joe Strummer biopic Joe Strummer: The Future is Unwritten, along with a soundtrack to the film.
