U.S. propane stocks are high, 33% over the 5-year average. Year-to-date propane exports are at a robust 1.6 MMb/d, well above the 1.4 MMb/d shipped out in 2022. Increasing propane production must be driving the growth in inventories and exports, right? Nay! Propane production is actually down, falling 9% from September 2022 to December, and even with meager growth this year is still 3% below the September high. So where are the propane export and inventory barrels coming from? And what does this mystery reveal about the trajectory of propane production over the next year or two? In today’s RBN blog, we do some sleuthing and come up with some answers.
This is not the first time propane markets have confounded our production models. Back in the summer of 2020, we were trying to get a handle on how propane production was recovering from the COVID meltdown that spring. As we discussed in Now You See It, Now You Don’t, the problem was that the EIA’s weekly production numbers (modeled from propane output from fractionators, plus propane and propylene from refineries) can differ significantly from the same agency’s monthly statistics (based on EIA forms filled out by gas processors and refineries — but published two months in arrears). It was a big problem at that time, and the inconsistencies between the numbers were driving us nuts, so we developed models that estimate “real” propane production for the most recent two months, then use that to project propane production for the rest of the year in our U.S. Propane Billboard Monthly report.
NGL Voyager offers subscribers a comprehensive market analysis of natural gas liquids exports which are driven by fundamentals, and combined with the latest industry buzz. The report examines U.S. export trends for propane, butane and ethane, and includes port of origin, destination and volume.
In the 2023 propane mystery, the weekly vs. monthly data issues do contribute to the whodunnit but are not a significant factor in the production disparity. They just make it a little more complicated to figure out what the data is telling us.
To make sense of that disparity, we’ll focus on the geographic footprint of NGL production that has by far the most impact on propane supply, demand and exports: the Gulf Coast, or PADD 3 in EIA parlance. Over the past five years, PADD 3 has been responsible for about 75% of propane production growth in the U.S. You would think that propane production moves in tandem with crude oil and natural gas production since all three hydrocarbons come out of the same hole in the ground — and you’d be right, most of the time. But sometimes — like over the past few months — there can be a disconnect.
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About the song
“It’s a Mystery” was written by Bob Seger and appears as the sixth song on Bob Seger & The Silver Bullet Band’s 15th studio album of the same name. The up-tempo song features two scorching solos from guitarist Tim Mitchell. Personnel on the record were: Bob Seger (lead vocals), Chris Campbell (bass), Tim Mitchell (guitars), Kenny Aronoff (drums), Scott Cragol (bass drum), Craig Frost (synthesizer), and Laura Creamer, Donny Gerrard, Shaun Murphy, Julia Waters, Luther Waters, Oren Waters (backing vocals).
The album, It's a Mystery, was recorded in the summer of 1995 at New River Studios in Fort Lauderdale, South Beach Studios in Miami Beach, Woodland Digital in Nashville, and Conway Studios in Los Angeles. Produced by Bob Seger and released in October 1995, it went to #27 on the Billboard 200 Albums chart. It has been certified Gold by the Recording Industry Association of America. Although credited to The Silver Bullet Band, many of the tracks feature session musicians. This was the last album Seger made before taking a hiatus to spend more time with his family until returning in 2006 with the album, Face the Promise. Three singles were released from the LP.
Bob Seger is an American rock and roll singer, songwriter, and musician. A locally successful Detroit artist with his bands, Bob Seger & the Last Heard and The Bob Seger System in the 1960s, he became nationally successful with his Silver Bullet Band and its 1976 live album, Live Bullet. His next release, Night Moves, helped make Seger an international star. He has released 18 studio albums, two live albums, five compilation albums and 68 singles, and has sold more than 75 million records worldwide. Seger was inducted into the Rock and Roll Hall of Fame in 2004 and the Songwriters Hall of Fame in 2012. He announced his retirement from touring in September 2018. His 2019 farewell tour, named the Travelin' Man Tour, grossed over $97 million.
