As ESAI’s one-year outlook describes, for US propane and propylene stocks to be basically unchanged from February to March breaks with the past two years when the March-on-February draw was as high as 5 million bbl. Traditionally, propane stocks bottomed out late in the first quarter toward the end of the heating season, when supply begins to overwhelm demand. The early arrival of this year’s rebuilding season reinforces ESAI’s bearish outlook based on its bottom-up country-by-country projections of the global LPG balance.
“Given these dynamics in US inventories and global fundamentals, the widening of Asian spot propane and butane to naphtha is exactly what we expect this year,” explains ESAI Energy Head of NGLs, Andrew Reed. “The lack of pressure on U.S. stocks reinforce what ESAI Energy’s global balance predicts, which is that in 2019 the global market will be unable to absorb excess US LPG.”
