Propane Supply Goes Up, Prices Go Down
Propane consumers in North Carolina have good reason to smile as we enter another heating season. How’s this for good news:
- Our country has more propane in storage than ever before
- Propane prices have dropped significantly from last winter
- Forecasters predict a warmer winter this year
Let’s start with overall supply. According to the U.S. Energy Information Administration (EIA), propane inventory reached nearly 100 million barrels by October 1, 2015. This is the highest level of propane inventory in the 22 years EIA has collected propane inventory data!
The EIA also reports that production of propane at natural gas plants reached 31.3 million barrels, or 172,000 barrels per day higher during the first six months of 2015, compared with the same 2014 period.
As the production of propane has grown, the ability to transport, store and export this abundant supply has expanded, lessening the risk of any bottlenecks in the supply chain.
You can read more about propane supply here.
What does all this mean for you?
Since supply and demand is such a critical factor in the price of propane, an abundant supply bodes well for residential propane prices. Consider this:
- The average wholesale propane price stood at about 50 cents per gallon lower than mid-October 2014.
- U.S. household expenditures for propane this winter are projected to be 18% lower than last winter; that’s due to a forecast of both lower fuel prices and lower heating demand.*
- The National Oceanic and Atmospheric Administration forecasts overall heating degree days this winter will be 7% lower than last winter and below the 10-year average.
*Source: Short-Term Energy and Winter Fuels Outlook, U.S. Energy Information Administration, 10-6-15