Will the 2021-22 heating season be a challenging year for propane? To be more specific, will it be a challenging year for U.S. propane exports? For the first time in many years, we are seeing lack of consensus amongst the analyst community and market pundits, and for good reasons. Since 2010, U.S. propane supply has grown at a staggering rate year-on-year, with U.S. propane supplies doubling in that period. Most analysts (including us), assumed that propane supply would increase on capital inflow in the upstream sector and billions of dollars of investments in the midstream sector – from processing plant to LPG export terminals. On the demand side, analysts assumed that all propane would be consumed by the ever-expanding economies in Far East and South East Asia. For the first time in recent memory, however, the 2021-22 season seems different. Exports could face pressure this season and may not show year-over-year growth.

While we have a few weeks remaining in propane heating season, it is unlikely that a major weather event will disrupt U.S. propane inventories. Post-Winter Storm Uri, U.S. Gulf Coast propane inventories are close to 5-yr lows as we approach the shoulder/summer injection season.