Domestic demand for propane and propylene in the US declined 30% last week, Energy Information Administration data showed Wednesday.
At the same time, US propane and propylene stocks increased by 3.686 million barrels to 45.77 million barrels, despite a 76,000 b/d reduction in production by refiner, blender and gas plant for the reporting week. The prior week hit a record for weekly production of nearly 1.6 million b/d.
Domestic demand was reported at 716,000 b/d for the reporting week ending May 30. EIA estimates domestic demand as a function of production, net exports and change in stocks.
The estimated export level for the week ended May 30 remained steady at 308,000 b/d from the previous reporting week.
According to Robert Merriam, a petroleum expert at EIA responsible for the Weekly Petroleum Status Report, the export data is collected from the US Census Bureau and has a two-month lag. The analyst team at EIA uses the export data to forecast the weekly export estimates.
As the EIA estimate shows exports remaining level, it can be interpreted that domestic demand had declined to result in the surge is stocks. Since the full export data will not be available until August, the exact decrease in demand can not verified with certainty, explained Merriam.
The most recent week marked the second largest boost for propane stocks ever reported by EIA as it was just under the record build of 3.71 million barrels for the week ended May 2.
Gulf Coast stocks increased nearly 2 million barrels to 2.46 million barrels. In the previous reporting week, these stocks saw a smaller increase of 640,000 barrels.
Midwest stocks rose nearly 1.27 million barrels to 16 million barrels.
Atlantic Coast saw an increase of 269,000 barrels to 3.27 million barrels in inventories.
US stocks of propylene for nonfuel use increased by 56,000 barrels to 4 million barrels.
Total imports during the reporting week declined 26,000 b/d to 39,000 b/d or almost 34% lower from the comparable week last year when imports were 59,000 b/d.
Source: Platts.com
