Propane Market Softens as Warmer Weather Delays Heating Season Peak

Weather Sensitivity

Propane is highly susceptible to winter weather. The recent bearish shift in meteorological models has caused traders to liquidate long positions, as the need for immediate, large-scale storage withdrawals has diminished. This delay is the main headwind for the commodity.

Export Demand Provides Floor

A strong export market, particularly driven by Asian petrochemical facilities using propane as a feedstock (PDH units), is preventing prices from collapsing entirely. This structural overseas demand absorbs excess US production, maintaining a price floor despite weak domestic heating demand.

Inventory Management

US propane inventories are within the five-year range, which is sufficient given the milder weather outlook. Distributors are currently managing comfortable stocks, meaning there is less urgency for spot buying, which will keep the market sideways until a definitive cold snap arrives.