EIA: U.S. propane stocks well-stocked for winter heating season

U.S. Energy Information Administration reported on Tuesday that the U.S. has a good supply of propane for the winter.

The EIA reported that the U.S. inventory of propane for the week ending September 26 was 103,000,000 barrels. This is about 13,000,000 barrels higher than the five-year average at this time, according to data taken from its weekly Petroleum Status Report.

Propane inventories can be used to determine the supply and demand of propane. Winter months are more demanding because propane is the primary heating fuel for about 5% U.S. households, mostly in the northern Midwest and Northeast.

The EIA reported that the production of propane gas plants increased by 5% during the first seven months this year, compared to the same period in 2020.

U.S. propane stockpiles tend to increase from April to September, when consumption is lower, and then decline from October until March as demand increases.

The EIA reported that weekly inventories in the United States have been consistently above the five-year mean since late May. It also noted that 70% of the U.S. storage capacity is located on the Gulf Coast where the majority of petrochemicals are consumed and exported.

The EIA stated that grain drying demand can affect Midwest propane inventory in some years.

This year's corn harvest is expected to be slightly later than average for 2020-24, which could require more propane in order to dry grain. The Midwest's grain-drying needs are typically met in early November and late October.

(source: Reuters)