Propane Prices on the Rise

The Energy Information Administration’s This Week In Petroleum reports the price for propane in the Northeast is on the rise.  Regional supply issues have added to overall price pressures, according to the EIA, sending residential propane in New England to $3.28 per gallon and $3.37 per gallon in Central Atlantic.


Here is an excerpt from the EIA newsletter released Jan. 5, 2011:


Prices in the region have risen over 45 cents per gallon since the start of this heating season, compared with a 29-cent increase in Midwest prices (where the residential propane heating market is much larger). Prices in New York State, where the supply disruption is centered, have grown by 56 cents over the heating season.


As reported in the November 10 edition of This Week In Petroleum, propane supply into New York State and the Central Atlantic and New England regions was disrupted earlier in the season due to an outage on the Enterprise TE Products Pipeline (TEPPCO) that brings propane into the Northeast through New York State. The pipeline failure occurred downstream of the Watkins Glen, NY terminal, which was able to remain operational, but pipeline flows to the Harford Mills, Oneonta, and Selkirk, NY terminals were curtailed. Rail and truck shipments from outside the region, as well as waterborne imports into Providence, RI and Newington, NH, have thus far sustained propane stocks in the Northeast while portions of the pipeline remain out of service. In fact, propane stocks in New England fell to just 39,000 barrels in mid-October, prompting companies to utilize truck and rail shipments from outside the region much earlier than typical to rebuild supply. The ongoing supply chain issues warrant monitoring, as there is potential for supply difficulties as we move deeper into the winter.


Cold weather in the Northeast during December translated into 5 consecutive stock draws in the Central Atlantic, while New England stocks fluctuated during the month. New England propane inventories were 0.7 million barrels on December 31, 72 percent above the 5-year average, while Central Atlantic inventories, at 1.6 million barrels, were 20 percent below the 5-year average (Figure 1). Central Atlantic stocks are almost 34 percent higher than levels seen two years ago when inventories in that region stood at historically low levels.


To see more of the EIA newsletter, please click here.

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