Ready-for sale (RFS) propane inventories increased 3.567 million
barrels. RFS inventories are now 60.9% of the total inventory from
59.5% last week. Inventories upstream of the fractionators that are
part of a mix of NGLs called Y-grade increased 306,000 barrels.

Propane production was down 26,000 bpd to 2.849 million bpd.
Propane imports were down 17,000 bpd to 84,000 bpd. Combined
propane supply was down 43,000 bpd. Domestic propane demand
was down 88,000 bpd to 717,000 bpd. Propane exports were down
327,000 bpd to 1.664 million bpd. Combined demand was down
415,000 bpd. In total it was a positive 372,000 bpd impact on U.S.
propane supply resulting in a 552,000 bpd build in inventory
compared to a 180,000 bpd build the previous week.

On December 26, 2024, the Department of Energy released its Final Rule: Energy Conservation Program: Energy Conservation Standards for Consumer Gas-fired Instantaneous Water Heaters. The rule would deprive consumers of energy choice, and would eliminate a product class of non-condensing tankless water heaters from the market. NPGA, along with coalition partners, have been engaged with this rule continuously, and commented on multiple proposals, and continuously sought meetings with the Department of Energy and other Federal agencies. NPGA was successful in delaying this rule for months, but DOE persisted in published a rule in the waning days of the administration. NPGA has vigorously challenged all DOE actions aimed at eliminating non-condensing appliances, including filing a lawsuit in Federal Court. NPGA and its coalition are currently examining options in response to its release. For further information, please contact Vice President of Regulatory and Industry Affairs Benjamin Nussdorf.

Propane production was down 23,000 bpd to 2.670 million bpd.
Propane imports were down 12,000 bpd to 134,000 bpd. Combined
propane supply was down 35,000 bpd. Domestic propane demand was
up 607,000 bpd to 1.436 million bpd. Propane exports were down
370,000 bpd to 1.719 million bpd. Combined demand was up 237,000
bpd. In total it was a negative 272,000 bpd impact on U.S. propane
supply resulting in a 351,000 bpd draw on inventory compared to a
79,000 bpd draw the previous week.

The inventory draw was in line with expectation but larger than
average for the week reported. Inventories remain above last year and
the five-year average.

Crude turns lower
Crude started the day moving higher hitting $75.29, just 19¢ below the 200-day moving price average. A couple of things seemed to turn crude lower. First was a light draw on crude inventories but very large builds of better than 6 million barrels each for gasoline and distillate inventories.

Perhaps more impactful was strong dollar and a report that President-elect Trump is considering declaring a national economic emergency so he can provide legal grounds for universal tariffs. Ultimately WTI closed at $73.32 which put it below its rising 5-day moving price average. It was the first close below the 5-day since December 27.

Propane production was up 16,000 bpd to 2.693 million bpd. Propane
imports were up 21,000 bpd to 146,000 bpd. Combined propane supply
was up 37,000 bpd. Domestic propane demand was down 905,000 bpd
to 829,000 bpd. Propane exports were up 378,000 bpd to 2.089 million
bpd. Combined demand was down 527,000 bpd. In total it was a
positive 564,000 bpd impact on U.S. propane supply resulting in a
79,000 bpd draw on inventory compared to a 643,000 bpd draw the
previous week.

Despite the light inventory draw propane prices surged higher helped
by a rise in crude’s price and cold weather outlooks for early January.
MB ETR gained 3¢ and Conway 4.75¢. Midwest inventories were down
733,000 barrels while inventories on the Gulf Coast were up 16,000 barrels.

Crude continues China rally
Crude continued its strong rally that started on reports that China is going take measures to stimulate its economic activity this year. Recently China has been accounting for about two-thirds of global crude demand growth which is the reason news on China’s economy has such an oversized impact on crude pricing.

The EIA reported a relatively light 1.178 million barrel draw in crude inventories, but that was offset by large builds in refined fuels inventories. Gasoline inventories increased 7.717 million barrels and distillate inventories increased 6.406 million barrels. Those builds far exceed expectations.

At 85.595 million barrels propane is 911,000 barrels, 1.1% higher than
last year and 5.32% above the five-year average for week 51 of the
year. MB ETR was up 1.5¢ and Conway 0.75¢.

U.S. propane production was up 10,000 bpd to 2.677 million bpd.
Propane imports were down 54,000 bpd to 125,000 bpd. Combined
supply was down 44,000 bpd. U.S. domestic propane demand was up
453,000 bpd to 1.734 million bpd while propane exports decreased
276,000 bpd to 1.711 million bpd. Combined demand was up 177,000
bpd. Overall, it was a 221,000 bpd negative impact on U.S. propane
supply resulting in an inventory draw of 643,000 bpd compared to a
draw of 422,000 bpd the previous week.

The Energy Information Administration (EIA) reported U.S. propane inventories
down 2.954 million barrels for the week ending December 13, this was the second
large drop in as many weeks. The draw put inventories at 90.099 million barrels.
That is 3.631 million barrels, 3.9% below last year and 9.65% higher than the five
year average for week 50 of the year.

A survey ahead of the report showed an average expectation for a 2.5-million-barrel
draw. Over the last five years inventory had averaged a 2.055 million-barrel draw
during week 50. Ready-for-sale propane stocks were down 2.091 million barrels to
59.614 million barrels. That was 66.2% of the total propane/propylene inventory.

U.S. propane production was down 75,000 bpd to 2.667 million bpd. Propane
imports were up 53,000 bpd to 179,000 bpd. Combined supply was down 22,000
bpd. U.S. domestic propane demand was down 402,000 bpd to 1.281 million bpd
while propane exports increased 376,000 bpd to 1.987 million bpd. Combined
demand was down 26,000 bpd. Overall it was a 4,000 bpd positive impact on U.S.
propane supply resulting in an inventory draw of 422,000 bpd compared to a draw
of 426,000 bpd the previous week.

Belvieu was unchanged on the day while Conway post a gain of 3/4¢. Conway is tracking more with crude’s uptick while belvieu has stayed muted. The international markets use belvieu to trade so that market is more liquid than Conway which could be the reason for the lack of movement in belvieu.

Crude inventory was down 5.073 million barrels. Gasoline inventory was up 2.362 million barrels. Distillates were up 3.348 million barrels.

Propane exports were up 821,000 bpd, imports down 40,000 bpd, production up 51,000 bpd, domestic demand down 860,000 bpd.

Propane prices were down 1/2¢ to 1¢ prior to the report and were holding those losses post report.
Crude was down a few cents per barrel before the report and remains there post report.

Crude inventory was up 2.089 million barrels. Gasoline inventory was down 4.407 million barrels. Distillates were down 1.394 million barrels.

Propane exports down 506,000 bpd, imports up 9,000 bpd, production down 66,000 bpd, domestic demand up 609,000 bpd.

Propane prices are up slightly after the inventory report. Crude is holding on to gains made earlier in the day.

A survey ahead of the report showed an average expectation for a
million-barrel draw. Over the last five years inventory had averaged
an 586,000-barrel draw during week 44. Ready-for-sale propane
stocks were down 945,000 barrels to 67.455 million barrels. That
was 67.1% of the total propane/propylene inventory.

U.S. propane production was down 11,000 bpd to 2.743 million bpd.
Propane imports were up 10,000 bpd to 110,000 bpd. Combined
supply was down 1,000 bpd. U.S. domestic propane demand was
down 600,000 bpd to 710,000 bpd while propane exports increased
711,000 bpd to 2.289 million bpd. Combined demand was up 111,000 bpd. Overall it was a 112,000bpd negative impact on U.S. propane supply resulting in an inventory draw of 146,000 bpd compared to a draw of 34,000 bpd the previous week.

U.S. propane production was 15,000 bpd to 2.687 million bpd. Propane
imports were down 17,000 bpd to 86,000 bpd. Combined supply was down
2,000 bpd. U.S. domestic propane demand was down 453,000 bpd to
879,000 bpd while propane exports increased 193,000 bpd to 1.857 million
bpd. Combined demand was down 260,000 bpd. Overall it was a 258,000
bpd positive impact on U.S. propane supply resulting in an inventory of 37,000 bpd compared to a draw of 221,000 bpd the previous week.

Propane prices continued to adjust from the craziness in the second half of September brought on by issues at propane export facilities. The month-to-month spread at MB ETR closed from 19 cents to 2.25¢ and the spread between MB
ETR and ENT was at 3¢ at the end of the day after being 17¢ at the end of September. ETR is now back above
Conway by 2¢ and trading at 45% of WTI crude.