59 million barrel draw since October is largest ever
U.S. propane inventories saw the largest draw on record from October to March this year, according to a note released by the EIA today. Propane inventories had been above normal levels since 2014, rising above 100 million barrels in both 2015 and 2016. Inventories in early October were about 19 million barrels above the five year average, but have since fallen to just below the five year average stock.
Source: EIA
Inventories have declined by 59 million barrels since their peak in September 2016, almost double the average draw in that period. While propane is sometimes used in industrial and agricultural sectors, its primary use in the U.S. is as a heating fuel for homes and businesses during winter. While this winter has been relatively mild, inventory draws have been 19 million barrels larger than even the very cold winter of 2013-2014.
Source: EIA
Domestic propane consumption has seen little change from last year, but exports have grown significantly. Five years ago U.S. propane exports averaged about 100,000 BPD. Exports have grown tenfold since then, peaking in December at 1.05 MMBPD. This is the first month ever that propane exports have exceeded 1 MMBPD.
Source: EIA
Asian petrochem sector is largest U.S. propane export customer
While some exported propane is used as a heating fuel, most of the growth in U.S. propane exports serves growing demand from the Asian petrochemical sector.
A significant expansion in propane export capacity has occurred over the last two years. Recently, Phillips 66 opened a new Gulf Coast export terminal capable of sending out 150,000 barrels per day (b/d) of propane or butane.
