The U.S. Energy Information Administration (EIA) has reported the highest levels of propane and propylene seen in U.S. inventories since the organization began collecting weekly propane inventory statistics 22 years ago.
Levels of propane and propylene reached 97.7 million barrels as of Sept. 11. In the first six months of 2015, inventories were 24.3 million barrels higher on average compared to the same period in 2014. The increase in inventories is attributable mainly to the Gulf Coast region over the the past year, said the EIA.
Also impacting inventories was the rise in production of propane and other hydrocarbon gas liquids (HGL), which has led to an expansion in the ability to transport, store and export these commodities.
During the first six months of 2015, production of propane at natural gas processing plants was 31.3 million barrels, or 172,000 barrels per day (b/d), higher than during the first half of 2014. Meanwhile, exports increased by 33.3 million barrels (182,000 b/d) for the same period.
Domestically, propane consumption is highly seasonal and weather dependent. It is used mainly for heating and as a feedstock for petrochemical plants, as well as for drying agricultural crops. As such, stocks of propane and propylene typically increase from the start of April through September. From October to March they are drawn down, as agricultural and heating demands increase.
However, this year inventories began increasing in mid-February, a full six weeks earlier than the historical average.