Propane inventories grow more than expected
May 22, 2025
The DOE inventory report had crude oil supplies up 1.33 million barrels, gasoline supplies were up 820, 000 barrels, and distillate were up 580,000 barrels.
The propane inventory report showed a bigger build than expected with supplies up 2.675 million barrels, putting total supplies at 53.099 and last year they were 64.215 million barrels. Midwest inventories up 958,000 barrels putting total stocks at 11.934 million and last year they were 16.827. Gulf Coast stocks were up 2.225 million barrels, putting total stocks at 34.417 million and last year they were 38.067 million barrels. Propane production was once again above 2.8 million bpd for the fifth week in a row, and this also is the fifth consecutive week where the market has seen the largest weekly production estimates over the past decade.
The EIA has begun to include a new data point on propane called; Propane Ready to Use or RTU. This is propane that has been fractionated and is ready for sale. As I said this is a new category and we do not have much historical data to compare this number to, but since April it has been a year and with each passing month, we get more historical data. This is currently a new category and data point, but it is being mentioned in the industry, so I did want to mention it. It is likely in five years, this will be a much-watched and debated piece of data.
Energy prices are lower on the news that OPEC+ says they will increase prodctuion in July more than their original plan. As mentioned recently OPEC+ is now focusing on gaining back market share and not necessarily prices. More barrels of oil on the market and a slower economy due to tariffs uncertainties could lead to lower prices. This outlook for more barrels on the market suggests a supply glut and lower price the current market price structure suggests a market that is tightly supplied.