US days of disposition broadly elevated, PADD 2 may still be susceptible to any late winter events
Coming in to the close of February EIA weekly stock estimates and our monthly forecasts suggest that the US is generally well supplied with propane on a days of disposition basis. February ending days of disposition is believed to be in line with levels seen in 2017 and well above the levels of last year and those at the start of 2014. Increasing production will allow stocks to be rebuilt quickly but must contend with expected continued increases in exports. Looking forward through 2019 we expect the US to be generally well supplied but not to the extent seen in 2015 and 2016 where new supply growth was trapped in the US as export terminals were undergoing construction and coming to completion.
PADD 2, on the other hand, has seen its February days of disposition estimate fall below levels seen in 2017 and approach the levels seen last year. The Conway propane price and its ratio to WTI have both been rising over the end of February in response. While we are currently forecasting a rapid and sustained recovery in days of disposition for PADD 2, due to the increases in production we have seen, it remains susceptible to reaching critical days of disposition in the event of a persistent or deep winter weather event through the remainder of the season.