Propane up despite light draw
The EIA reported U.S. propane inventories declined 552,000 barrels for
the week ending December 27. Industry analysts were expecting a 3.23
million-barrel draw. Over the last five years inventory has declined
3.096 million barrels during week 52 of the year.
Propane production was up 16,000 bpd to 2.693 million bpd. Propane
imports were up 21,000 bpd to 146,000 bpd. Combined propane supply
was up 37,000 bpd. Domestic propane demand was down 905,000 bpd
to 829,000 bpd. Propane exports were up 378,000 bpd to 2.089 million
bpd. Combined demand was down 527,000 bpd. In total it was a
positive 564,000 bpd impact on U.S. propane supply resulting in a
79,000 bpd draw on inventory compared to a 643,000 bpd draw the
previous week.
Despite the light inventory draw propane prices surged higher helped
by a rise in crude’s price and cold weather outlooks for early January.
MB ETR gained 3¢ and Conway 4.75¢. Midwest inventories were down
733,000 barrels while inventories on the Gulf Coast were up 16,000 barrels.
Crude continues China rally
Crude continued its strong rally that started on reports that China is going take measures to stimulate its economic activity this year. Recently China has been accounting for about two-thirds of global crude demand growth which is the reason news on China’s economy has such an oversized impact on crude pricing.
The EIA reported a relatively light 1.178 million barrel draw in crude inventories, but that was offset by large builds in refined fuels inventories. Gasoline inventories increased 7.717 million barrels and distillate inventories increased 6.406 million barrels. Those builds far exceed expectations.
