Did 1998 Reflect Structural Change?

5/17/99


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Table of Contents

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Did 1998 Reflect Structural Change?

Demand

U.S. Propane Demand Sectors (1996)

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1998 Propane Prices Fell with Crude Oil

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Warm Weather Behind Demand Decline

1998 Warm Weather Kept Demand Down

Supply

Propane Production Fell in 1998

1998 Propane Net Imports Increased

Algeria Was Major Source of ‘98 Import Increase

U.S. Chemical Use & Large Storage Attracts Excess Propane

Petroleum & Propane Market Over Supply

Average Stock Levels: Crude Market & Propane

Futures Market Incentives to Build Petroleum Stocks

New “Structure” or Cycle?

Near-Term Future

Large January Draw Did Not Remove Excess

How Might Excess Stocks Decline?

Near Term U.S. Propane Production

Major Mid-Term Growth in Atlantic Basin LPG Exports Will Affect U.S. Imports

Uncertainties Lean Toward High Stocks

Weak Build, Large Draw to Remove Excess

Normal Stocks Possible at End of Next Winter

Conclusion

Watch for Update in EIA Winter Outlook (October 1999)

Author: John Cook

Email: jcook@eia.doe.gov

Home Page: www.eia.gov

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