With the coldest of the winter season still ahead for the US, demand for propane soared to a record high last week, according to the Energy Information Administration (EIA).
January has been a frigid month with multiple winter storms traversing the Midwest and Northeast, which boosted heating demand for residential and commercial building structures. Also, demand has increased for industrial purposes, such as the production of plastic.
Going back to 2004, EIA data showed demand has never been higher for propane.
Months ago, research firm IHS Markit Ltd warned US propane inventories were at a record low and would be extremely tight this winter. Tight supplies have sent propane prices higher since the beginning of the pandemic, up more than 400% to a seven-year high in late 2021 but have receded some -- now attempting to make another run.
Average temperatures across the US (or the Lower US 48) will remain below a 30-year seasonal average through Feb. 2 and could increase further demand for propane.
Heating degree days have been above seasonal trends for January.
Soaring energy prices, plus food, shelter, and other costs, have been extremely painful for the wallets of millions of Americans. However, there is some good news on the energy front. Temperatures across the US are expected to rise after Feb. 2. Looking further ahead, the National Weather Service forecasts above-average seasonal mean temperatures for February, March, and April from the Southwest to the entire eastern third of the contiguous US.