Conclusion

• U.S. and regional propane inventories are expected to begin the heating season below normal level of 60 MMB.

• Propane supply likely to remain above prior year levels due to:

  • high co-production of propane as refineries struggle to keep up with strong demand for motor gasoline.
  • high gas plant production of propane as surging crude oil prices keep gas plant margins in positive territory.
  • however, higher U.S. exports of propane may act as wild card as new markets emerge in Mexico and South America.

• Residential heating demand likely to increase if weather returns to normal following above normal temperatures during the past two winters.

• Consumers will continue to pay more due to higher world oil prices.

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In conclusion, inventories are expected to be below normal for the heating fuels. Propane will probably be below the 60 MMB target.

We’ll probably see lower imports for propane but we’re also seeing higher production.

Heating demand may be higher if temperatures return to normal.

Consumers will pay more due to higher prices.