What is happening with Propane right now?

[Vern_in_IL]

So it seems we are exporting as much as we can because the Asian markets are like three times or more our price for propane/LNG.

Was this all caused by the frozen wells in Texas, or is there an international shortage of Propane/LNG? I am just thankful that we don't have the capacity to export more propane/LNG than what we do. Prices would be 3x as high, and our stockpiles are like 10 percent or more deficient compared to last year.

Why did they not "top off" propane/LNG stockpiles/underground reserves during the summer? Every year I seem to get reports of reserve shortages, what is going to happen to a really cold winter when these reserves get depleted?

 

[Kruse]

I heat with propane and have a 1000 gallon tank that I own. (So I can buy it from the cheapest source) Traditionally, the lowest price of propane is in June and I fill up then. I also contracted my winter use of propane for $1.45/gallon this coming winter. With the current political climate, I figured I’d be crazy not to. Just sayin’. If you’ve got to buy it outright, good luck this coming heating season.

 

[billt460]

I just filled a couple of 20 pound tanks the other day at our local Tractor Supply. It was $2.99 @ gallon. Last year I think it was $1.99 to $2.49. But it's still warm here. In a few months I'm sure it will go up, especially after all the snowbirds start piling in here with their RV's....... Provided they have any.

 

[MNgopher]

I wouldn't confuse propane with LNG. The two are different products and require vastly different handling.

The EIA does an excellent job describing what is driving propane pricing these days and can be found here:

This Week In Petroleum Summary Printer-Friendly Version - U.S. Energy Information Administration (EIA) -

Gasoline Production, Imports, Stocks, Supply, Prices by Grade and Sales Type, Retail City Average Prices, Data and Analysis from the Energy Information Administration.

www.eia.gov

Basically boils down to the US using about 1/2 of the propane that we produce in the US. The rest is exported, and pricing internationally has risen dramatically. Since almost 1/2 of our propane production is exported, international pricing drives domestic pricing.

In addition, Canada has opened the ability to bulk export propane directly to pacific buyers, meaning they need to send less to the US, typically the Midwest, as they have another market for their product. That results in increases in pricing for midwestern users...

 

[wpod]

Businesses have learned to milk the Cow for every last drop of milk they can squeeze out of the Udder.

 

[Cujet]

I have one heck of a time getting inexpensive propane in South Florida. Florida Public Utilities was, for years, effectively charging me between $5 and $7+ per gallon. Had them remove the 250 gal tank and issue a credit for unused propane.

Water heater, stove and dryer were propane. I did not use all that much, but the cost was still near $200 per month.

I installed a Hybrid water heater (has an air-condition unit on top) and it cools my garage! Saved $200 per month in total, as my electric bill went down when I removed the Garage AC window unit. And I use very little propane now.

I now have 2ea 60 pound tanks. Each one lasts about 9 months. Although propane is still expensive at $3.45 per gal, I don't use much and I can fill 'em myself at the hardware store.

 

[zzyzzx]

Walmart Propane exchange price is still the same as it was earlier this year.

 

[PandaBear]

My understanding is also that propane and natural gas is part of the fracking operation (along with oil), and since the fracking industry went bankrupt the production have reduced for all of them, the prices of propane would likely have swing further than natural gas due to it being a liquid in pressurized room temp container rather than having to be refrigerated to stay liquid like natural gas.

 

[MNgopher]

For the claims that reduced production is what is resulting in higher prices, I'm just going to put this graph out there, straight from the EIA. You can find it too, at https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M_EPLLPA_FPF_NUS_MBBL&f=M (And I know someone will ask - the data in the chart goes through July of 2021). The true international constraints are higher demand and lower oil production internationally - not domestically.

 

[Snagglefoot]

Propane is a traded commodity and traders got to trade. But if you want another reason, the US now exports 1.2 million bbls a day of propane, up from almost nothing 10 years ago.

 

[Snagglefoot]

For the claims that reduced production is what is resulting in higher prices, I'm just going to put this graph out there, straight from the EIA. You can find it too, at https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M_EPLLPA_FPF_NUS_MBBL&f=M (And I know someone will ask - the data in the chart goes through July of 2021). The true international constraints are higher demand and lower oil production internationally - not domestically.

View attachment 73883

You bet. Amazing growth in propane production, matching up with the gas production growth in the Marcellus shale. Note, the graph is in thousand bbls per month. The export graph is thousand bbls/day. Since most propane is extracted from natural gas, a boom in natural gas production resulted in a boom in propane production. However, exports got rid of the glut. Maybe they are exporting too much?

 

[4WD]

Yep - whilst oil/gasoline have gotten the most attention - natural gas is way up too …

 

[Snagglefoot]

There is no way to sugar coat it.
Propane follows crude oil. Since the currant administration all but stopped our oil production we are buying oil from our enemies at inflated prices.

For clarification, the US stopped oil production growth. ( almost). Daily production is still over 11.2 million bbls per day.

 

[NormanBuntz]

I wonder what Hank Hill would say on this subject. Of course that's Texas.

 

[finmile]

I think all energy prices are a little high now, globally. It’s a post-COVID19 symption. Inflation and over-heating of economy on a global level. Hopefully it will plateau by next spring.

 

[Zee09]

Three years back I filled my 1k tank at 67 cents and 86 cents.
Last year much higher.
Now $2.19 the cheapest place.
I do own the tank.
Gas went up here 14 cents over night.

Expensive energy is an economy killer...

 

[mightymousetech]

There is no way to sugar coat it.
Propane follows crude oil. Since the currant administration all but stopped our oil production we are buying oil from our enemies at inflated prices.

Canada is your enemy?

 

[eljefino]

There is no way to sugar coat it.
Propane follows crude oil. Since the currant administration all but stopped our oil production we are buying oil from our enemies at inflated prices.

Oil imports and exports - U.S. Energy Information Administration (EIA)

U.S. crude oil imports sources including OPEC and Persian Gulf, and top five source countries of U.S. oil imports and destinations of U.S. crude oil exports.

www.eia.gov

We're making so much we've just become a net exporter!

That's a good thing... I remember the early 2000s when we were buying oil from al queda training schools.

 

[Donald]

If you use propane at your house for more than a gas grill then the first thing to reduce your propane cost is to own your tank. Negotiable to buy the tank you rent or have one installed. No yearly/monthly rental cost and the price per gallon is less and you can shop around for cheapest price.

 

[Vern_in_IL]

So I filled my tank(at 15%, 500 gallon) to 80% max fill and it cost me 500 back in June. A neighbor just had his tank filled today, $900 baby!