US propane supply is expected to tighten in the rest of 2020 as the COVID-19 pandemic, and a global crude oversupply put production under pressure this spring. As a result, exports are expected to slow down or stop when inventories cannot sustain domestic heating and crop-drying demand.
Natural gas and natural gas liquids (NGL) production are expected to fall by 5% in the Permian basin and by up to 20% in the midcontinent, DCP Midstream estimated in May. This will likely result in slower builds in midcontinent stocks. At the same time, the influx of Canadian NGLs into the US midcontinent is forecast to fall and tighten supply further.
Data from the Energy Information Administration (EIA) showed that US propane inventories rose 0.6% year-on-year to 69 million barrels in the week ended June 19. Midcontinent propane stocks rose 17 barrels to 3.6 million barrels below the year-ago level, while USGC inventories stood at 44 million barrels, slightly higher than the year-ago level.
