Propane Supplies Lower Than Normal Heading Into Winter
September 23, 2021
Written By Tim Danze
You likely have seen many signs from employers seeking workers lately. Bloomberg reports thousands of cities and states across the United States are facing the most acute labor shortage in recent memory. The high demand for workers is across the board in a wide range of industries. The U.S. labor market is down about 5.7 million jobs from February 2020. The difficulty hiring has impacted the trucking industries, and that is a concern as winter looms.
Winter is coming, and propane demand is sure to rise. Like clockwork, the first cold snap generates a rush of propane tank refill requests all at once. While it’s true winter and colder temperatures come every year, getting everyone to properly prepare in advance is an annual challenge. There are just not enough drivers, trucks and hours in the day to haul all the propane that is needed within such a constricted timeframe. A shortage of drivers will only add to the difficulty. If you’ve yet to fill your tank, I encourage you to act now.
Current stock levels are low and are unlikely to build up enough to reach typical storage levels prior to winter. As of Sept. 2, current U.S. total propane supplies sit at 69.282 million barrels. This is at the bottom of the three-year average range. At the same point in time last year, there were 95 million barrels. We would need to see roughly 20 million barrels of propane added to storage reserves in the next five weeks to get close to what the industry would consider normal pre-winter levels for propane supplies. This will be a challenge for the industry.
My advice to anyone with room in their propane tank would be to do yourself a favor and fill it up now. MFA Oil has had a good year with propane contracting, and many of our customers have signed fixed-price contracts. That should help eliminate resistance to ordering propane now instead of waiting on the possibility of better prices, which are unlikely to come.
Acting now can help everyone avoid issues caused by a logistical bottleneck down the road. We work hard to keep all our customers’ tanks well stocked with propane, but some preparation from customers is helpful and appreciated. If you’ve yet to check your tank levels, please do so soon and give us a call if you need a delivery. Propane suppliers can have a hard time keeping up with an avalanche of calls from customers who allow their tanks to run lower than they should. When you add the current shortage of drivers on top of that type of event, it creates legitimate concerns for this year.
Even if the outlook for the winter forecasts above-average temperatures, you can usually count on one or two cold blasts to challenge the propane distribution system. When these blasts hit, everyone wants propane at the same time. Those who plan ahead, by filling your tank now or signing up for our Auto-Fill Program, gain peace of mind knowing they won’t have to worry about their tanks running out.
As I mentioned before, national propane supplies are not great, and I doubt it will drastically improve between now and the arrival of colder temperatures. Given those dynamics and upcoming seasonal demand, propane prices are more likely to rise than fall. The best time to beat peak demand is well in advance. That time is now, and the answer is simple. Give your local MFA Oil office a call and get your propane delivery scheduled. Please don’t wait until it’s too late. I promise you won’t regret it.