Propane Weakens on Milder Forecasts Despite Strong Export Demand

Weather-Driven Price Action

The primary driver for propane is short-term weather. The bearish outlook for the remainder of December has caused price declines, as residential and commercial heating demand has yet to accelerate meaningfully. The lack of heavy storage withdrawals signals that current supply is adequate.

Naphtha Spread Dynamics

Propane is also competing heavily with naphtha as a petrochemical feedstock. With propane prices currently being competitive, demand for exports to Asia for petrochemical use remains robust. This overseas pull is critical in preventing a steeper price collapse in the domestic market.

Inventory and Production

Despite the domestic demand slump, US production remains strong. The market is balanced precariously; only a sustained, severe cold snap would be sufficient to deplete inventories and trigger a definitive price rally.