Total US inventory remained low into April due to higher than expected exports. Mont Belvieu reacted to slow pace of inventory and days of supply growth in April with a mid-month increase in the ratio of propane to crude from the low 50% range to nearly 60% later in the month. Although US exports are high in April, production growth should allow days of disposition to increase at a faster pace than last year. IHS expects lower exports combined with higher supply due to a recovery in US crude production to lead to better stocked inventories in the winter.
On a PADD level, the industry needs to closely monitor PADD 2 supply/demand dynamics over the next several months. Weak Conway-Mont Belvieu price spreads may incentivize low motivation to hold inventory in PADD 2. It appears that PADD 2 inventory over the past few months has not grown at typical season levels due to the spread and it is expected that end of April inventory’s will be extremely low.