Higher supply via gas plants and refineries post turnaround season reduces risk of critical days of disposition this winter
Higher gas plant supply and historically high refinery utilization rates helped propane supply overcome stronger export demand in November and December. While inventory continues its seasonal decline, with the latest supply levels witnessed over the past several months, it is increasingly unlikely that the US, as a whole, will experience critical days of disposition in Q1 2019.
The sharp rise in PADD 3 inventory in September and October lowered the likelihood of a critical days of disposition situation in early 2019. However, extremely cold weather or a sharp increase in exports could quickly revive the risk of low days of disposition in PADD 3.
Although PADD 1 inventory appears to be at near record high inventory levels entering the cooler months of the winter, higher exports from the Mariner East terminal could lead to stronger draws than previous years. PADD 2 inventory has fallen significantly over the past few weeks due to colder weather and should be monitored closely as it is beginning to fall to levels closer to 5 year minimums.
(NPGA note: NPGA is seeking additional information and clarification on the status of PADD 2 inventory levels.)