Underground Journal

Learn About Propane Gas Prices

Propane gas is generally the heating fuel of choice for rural residential homeowners. However, propane has far more uses than that. Let’s exam who uses propane gas and how it will relate to current propane prices.

What affects propane supply and demand and price? There are many variables when it comes to propane pricing. Weather has a large effect on prices. Refinery production and inventory sticks also play a role in propane. Also propane is refined from crude oil and natural gas, so those 2 fuels will affect LP gas prices.

More than half of the annual propane demand occurs between October and March. This is because of winter weather. If the winter is very cold, then demand for home and commercial heating will go up and will cause prices to go up too.

Where does propane come from? Propane is one of many by-products of crude oil and natural gas. A little over half of propane comes from crude oil refining and the balance comes from natural gas processing. Therefore if you want to follow propane price trends, you will need to look at natural gas and crude oil prices. Propane has generally tracked closer with crude oil than with natural gas.

Approximately 90% of propane use is supplied by propane from the United States with the other 10% being imported.

The United States receives most of its imported gas from Canada.

Depending on economic conditions, the petrochemical industry in the Untied States is the largest user of propane. Fortunately this industry is flexible in its use of fuels. They are able to switch from natural gas to propane to reflect cheaper fuels for their use.

Typically, propane stocks tend to build during summer months. It is during this time that homeowners may want to lock in propane prices or even fill their tank at this time to benefit from lower prices.

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