LPG (liquefied propane gas) prices in North America reached their highest level in recent years in late October. This price increase is attributed to strong domestic demand across the continent and significant exports to regions such as the Far East.
Propane Price Increase on the U.S. Gulf Coast
According to assessments, the price of propane on the U.S. Gulf Coast reached $1.0925 per gallon on October 22, marking one of the highest prices since September 2022. The propane-to-crude oil ratio at this time was about 46 percent, which is consistent with last year.
The propane-to-crude oil ratio at Mont Belvieu in Energy Transfer reached 47 percent, which has steadily increased over the past month. The ratio in Enterprise was also 46 percent. These ratios are now in line with forecasts for 2025.
Increase in Propane Exports and Its Impact on Inventories
The increase in propane prices on the U.S. Gulf Coast occurs while propane exports from the United States have remained above 2 million barrels per day for the past four weeks. Japan was the largest importer of propane in October, accounting for about 27 percent of total U.S. propane loadings, with China in second place at 17 percent.
This steady export trend is one reason for the decline in propane and propylene inventories in the United States to below 106 million barrels for the first time since early August. In the week ending October 16, inventories fell to 105.846 million barrels, the lowest level since early August.
As a result, propane prices in Canada have also been influenced by Gulf Coast prices. Delivered propane prices in Edmonton reached 96.375 cents per gallon in October, reflecting an increase of 1.375 cents.
Strong demand for butane has also been observed in North America, especially with the U.S. transition to winter-grade gasoline occurring two weeks ahead of schedule on September 1. Butane prices at the Enterprise terminal reached $1.785 per gallon on October 22, one of the highest levels since March 2022.
Butane inventories in western Canada have also decreased, falling to 595,700 cubic meters from September to October. This decline coincided with rising butane prices and increasing crude oil prices.
In addition to domestic demand, export demand for butane has also been strong year-on-year, with average U.S. loadings in October reaching 473,000 barrels per day, up from 351,000 barrels per day last year. Indonesia, Morocco, South Korea, and India have been the largest importers of U.S. butane.
