A Look at Propane Inventory
February 25, 2021
The propane inventory report had stock down 2.986 million barrels less than expectations and putting total stocks 48.649 million barrels and last year at this time total stocks were 68.132 million barrels a difference of 19.483 million barrels. Propane has been very active and price movement crazy. There has been some real demand for prompt barrels, barrels available right now, compared to “anys”, which deliver at the end of the month. Over the last week those prompt prices at Conway have been traded as high as $1.60. I hope that some warmer temperatures and slowly getting production back will begin to make all this better. Each passing day get us one day closer to spring.
Midwest stocks were down 1.616 million barrels putting total stocks at 11.7325 million barrels which is 1.531 million barrels less than last year at this time. Gulf Coast stocks were down 439,000 barrels putting total Gulf Coast stocks at 28.358 million barrels which is 18.673 million barrels less than last year at this time. There seems to be many analysts that think exports of propane will continue to be strong for the foreseeable future and that offers support to prices. It will be interesting to see where the market is in 6 months.
DOE inventory for refined fuels products and crude came in as follows. Crude stocks up 1.29 million barrels, gasoline stock were up 1,000 barrels and distillates were down 4.97 million barrels. Stocks of crude oil at Cushing, Ok were up 2.807 million barrels putting total stock there at 47.823 million compared with last year when there was 39.149 million barrels a difference of 8.674 million.
Barclays raised its oil price forecast by $6-7 per barrel and sees “staying power” in the recent rally. The main reason they did raise this forecast was in response to US tight oil production not producing as much as anticipated.
This current rally has been relentless with very few pullbacks or down days. There is a lot of money flowing into all commodities and a lot of stories and reports about strong commodities and super cycles that are helping to support the influx of money. There will be a pullback or some type of correction the big question that no one knows is when. But the current overall sentiment seems to be, and there are several reasons cited, that prices on the majority of commodities will be higher. Specific to energy is the fact that lower investment in exploration and production leads to higher prices and that is what has happened as a result of the coronavirus crisis and the push to go green.