It may be hard to believe, given the oven-like temperatures many of us have been dealing with in recent weeks, but the 2023-24 propane heating season is on the horizon—its official start is October 1, just seven weeks away. . To quote Bill and Ted from theirs Excellent adventure movie franchise, one could argue that, for the US propane market, “The best place to be is here. The best time to be is now.” Production is at or near an all-time high, as are exports. Propane inventories are well above their five-year average, which should help stave off winter supply problems. And propane prices? They’re up from where they were a few weeks ago, but only in the 70 cents/gal range, well below the $1/gal-plus levels that were the norm between Q3 2021 and Q3 2022. The temptation may be to shout. , “Party party guys!” but as we discuss on today’s RBN blog, the reality is that the propane market is an ongoing and unpredictable adventure, and you never know for sure what lies ahead.
(You might be thinking, “Wait, the title of the blog says Bill and Todd, not Bill and Ted.” Well, this blog is based in part on RBN’s recent webcast, which included presentations by Bill Marks, Chief Strategy Officer supply and risk management for AmeriGas and Todd Root, director of NGL and petrochemicals at RBN.To view a replay, click here.)
So where do things stand in the U.S. propane market? Well, according to statistics released by the Energy Information Administration (EIA) on July 31, propane gas plant production hit an all-time high in May: 1,979 Mb/d (right end of the blue line in the left graph in Figure 1), a mark that was 19 Mb/d higher than the previous record set last September and 136 Mb/d (7%) higher than the May 2022 production level. RBN’s forecast (dashed line d (gold in the graph on the left) shows that propane production exceeds 2,000 Mb/d. of this summer and averaging just under the 2,000 Mb/d mark for the whole of 2023 (red line on the right in the left graph), up from about 1,850 Mb/d last year (red line to the left).
