July 1, 2021 – Wall Street Journal
Propane Prices Are Cooking, Signaling Higher Winter Heating Bills for Many
By: Ryan Dezember
Overseas demand has depleted domestic stockpiles, leading to potential cold-weather price surges for U.S. households
People all over the world stopped driving and flying during lockdowns, but they didn’t stop cooking or heating their homes, which are the primary uses of propane among consumers from Italy to India. Meanwhile, petrochemical plants in China and other Asian countries kept running because of the complexity of shutting down such operations.
“Asia demand might be more inelastic than we thought,” said Rusty Braziel, chief executive of consulting firm RBN Energy LLC. “Prices are high, and unfortunately we’re not seeing the number of cancellations that we would have otherwise expected.”
Mr. Braziel, a former propane trader, said many newer petrochemical facilities were built specifically to process propane into propylene, used for plastics, as opposed to older plants that toggle between feedstocks depending on price.
In the U.S., Americans grilled, warmed outdoor spaces and heated homes when they would otherwise be out at work, which buoyed domestic demand. Then, in February, the midcontinent froze as far south as Texas, boosting demand while simultaneously choking supply lines with ice.
Read the full article here: https://www.wsj.com/articles/propane-prices-are-cooking-signaling-higher-winter-heating-bills-for-many-11625116423
