Propane inventories fall below five-year average as exports rise

Since October, U.S. propane inventories have fallen by 59 million barrels, marking the largest decline for the six-month period, according to the U.S. Energy Information Administration. In October, the inventories were about 29 million barrels more than the previous five-year average but have since fallen to slightly below the five-year average.

“The strong inventory draw occurred despite weak heating demand this winter and mainly reflect rapid growth in propane exports,” according to the EIA. In the United States, propane is primarily used as a heating fuel in the winter. Propane inventories usually reach a peak between the end of September and the middle of October and decease to the lowest level in March. This winter, the inventory fell by almost 23 million barrels more than the previous one and 19 million barrels more than the “winter of 2013-14, which featured several extremely cold weather events.”

U.S. propane consumption has been flat while production and exports have risen. In December, the United States exported 1.05 million barrels per day of propane and was the first month exports have exceeded 1 million barrels per day. Exported propane is used as a petrochemical feedstock, for transportation fuel and heating. The majority of the growth in exports is related to the “expanding petrochemical sector in Asia,” according to the EIA.

The ability for the United States to export propane has risen because export terminals have expanded and opened and shipping fleet have grown over the past four years. In November, Phillips 66 opened a Gulf Coast export terminal which can send out 150,000 barrels per day of propane or butane.