Propane situation update

February 5, 2014 | Washington, DC By Energy Information Administration

U.S. Energy Information Administration

Independent Statistics & Analysis

www.eia.gov

NOAA forecast for below normal temperatures across much of the country through February 14; somewhat improved after

6-10 day outlook

8-14 day outlook

Source: National Oceanic and Atmospheric Administration Climate Prediction Center, made February 4

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Heating fuel market shares by region

Share of homes by primary space heating fuel within each Census Region (fuels add to 100%) Midwest West Northeast natural gas electricity heating oil propane wood kerosene/other/no heating South DC U.S. total 116 million homes

7%

propane 4.5%
Source: U.S. Census Bureau, 2012 American Community Survey

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Regional share of all U.S. households by primary heating fuel

Share of homes by primary space heating fuel across Census Regions (regions add to 100%)

propane
Northeast 14%

heating oil
Northeast 81%

natural gas
Northeast 20%

Midwest

36%

Midwest

5%

Midwest

31%

South

34%

South

10%

South

23%

West

16%

West

4%

West

26%

Source: U.S. Census Bureau, 2012 American Community Survey

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Propane share of space heating demand by key regions and states

State
Michigan Wisconsin Ohio Minnesota Missouri Illinois Indiana Iowa Kentucky Tennessee Oklahoma Kansas Nebraska South Dakota North Dakota

Propane-Heated Homes
320,522 245,071 240,185 213,359 212,317 189,025 176,520 162,117 113,175 110,486 103,017 83,386 57,442 54,015 38,617

Share of Total Homes

8% 11% 5% 10% 9% 4% 7% 13% 7% 4% 7% 7% 8% 17% 13%

State
New York Pennsylvania New Hampshire Massachusetts New Jersey Connecticut Maine Vermont Rhode Island

Propane-Heated Homes
237,738 188,880 72,091 68,517 60,990 43,849 41,477 38,497 10,361

Share of Total Homes

3% 4% 14% 3% 2% 3% 7% 15% 3%

Northeast Total

762,400

4%

Midwest Total

2,319,254

7%

Source: Census Bureau, 2011

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PADD 2 (Midwest) propane inventories have trended lower on strong crop drying and extremely cold temperatures
PADD 2 propane inventories (million barrels) 35
Typical corn harvest dates (Sept 20 Nov 10) Rolling five-year average 15.6 MMbbls

30 25 20 15 10
January 31 9.6 MMbbls

rolling fiveyear average and range

inventory level

5 0 Jan-12

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Source: EIA, Weekly Petroleum Status Report, data through January 31

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Conway (KS) price premium over Mt. Belvieu (TX) grew rapidly in late January, but has since narrowed
propane and propylene spot prices dollars per gallon 5.00

4.00

The positive spread between Conway and Mont Belvieu will draw supplies northward into areas most impacted by cold weather

3.00 Conway, Kansas (PADD 2) Mont Belvieu, Texas (PADD 3) 1.00

cold weather corn harvest

2.00

0.00 Jul-13 -1.00

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-14

price spread (Conway minus Mont Belvieu) Feb-14

Source: U.S. Energy Information Administration, Thomson Reuters, data through February 4

U.S. Energy Information Administration

Retail propane prices in the Midwest have risen sharply

dollars per gallon 6.00

5.00 PADD 1 Heating Oil 4.00 PADD 2 Heating Oil 3.00 PADD 1 Propane 2.00 PADD 2 Propane 1.00 winter 2011-2012 0.00 Oct-11 last winter this winter through February 3 Mar-13 Oct-13 Mar-14

Mar-12 Oct-12

Source: State Heating Oil and Propane Program, data through February 3 8

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State-reported residential retail prices for states in the Midwest

1/6/14
Indiana Iowa Kentucky Michigan Minnesota Missouri Nebraska North Dakota Ohio South Dakota Wisconsin 2.806 1.960 2.517 2.532 2.322 2.251 1.911 2.263 2.890 2.065 2.194

1/13/14
2.849 1.997 2.540 2.575 2.330 2.265 1.920 2.273 2.950 2.081 2.241

1/20/14
2.939 2.584 2.577 2.638 2.439 2.433 2.005 2.322 2.999 2.088 2.276

1/27/14
4.215 4.709 3.785 3.611 4.610 3.997 4.073 4.569 3.731 4.107 4.490

2/3/14
4.265 3.590 3.852 3.766 3.967 3.672 3.357 3.839 3.908 3.664 3.945

Residential retail price (dollars per gallon, excluding taxes)

Note: Illinois, Kansas, Oklahoma, and Tennessee do not report information Source: EIA, State Heating Oil and Propane Program, data through February 5 http://www.eia.gov/petroleum/heatingoilpropane/

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U.S. propane production and trade trends

U.S. propane and propylene production, imports, and exports thousand barrels per day 1,600 1,400 1,200 1,000 800 600 400 imports 200 0 2005 exports Since January 2011, production and exports have has grown by about 300 thousand barrels per day. Trade press reports suggest exports fell in late January 2014. production

2006

2007

2008

2009

2010

2011

2012

2013

Source: EIA, Petroleum Supply Monthly through November 2013

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Winter 2013 propane supply diagram

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For more information

U.S. Energy Information Administration home page | www.eia.gov Short-Term Energy Outlook | www.eia.gov/steo Annual Energy Outlook | www.eia.gov/aeo International Energy Outlook | www.eia.gov/ieo Monthly Energy Review | www.eia.gov/mer Today in Energy | www.eia.gov/todayinenergy State Energy Portal | www.eia.gov/state Drilling Productivity Report | www.eia.gov/petroleum/drilling

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