Prices for propane are expected to grow through 2018, according to the EIA’s latest Short-Term Energy Outlook (STEO), which was released on April 12th. The highest average monthly price is expected in September of that year. After that, the price is predicted to gradually fall until 2022.
What will the price of propane be in the future?
Forecasters make projections about the future of a given industry based on historical trends and present market conditions. Listed below are a few of the forecasted trends for 2022:
U.S. Propane Production and Exports
The propane business in the United States may encounter production and export issues in 2022. Supply difficulties will almost certainly be a concern.
The propane market saw historically low inventories in 2020 and 2021, affecting supply. In early 2022, the best projections predict that US gas plants will produce only 27 to 28 billion gallons of propane per year, or around 1.8 million barrels per day. For the same time period, US propane exports are expected to be 1.4 million barrels per day, nearly the whole amount produced.
Despite the decline in propane stocks, export quantities have remained high due to low domestic pricing. As a result, the stock has been depleted. That low stock, along with only moderate production increases, means the United States will have a limited propane supply for export. Exports in 2022 may not expand at the same rate as they have in the past.
Propane Inventories
Because of low domestic production levels and near-record import quantities, propane stockpiles are at an all-time low. According to projections, 2022 reserves will lag considerably further behind 2021 inventories until the middle of the year.
Propane inventories are expected to fall to around 30 million barrels in March 2022, then rise to 59 million barrels in June. This figure is expected to rise until September, when it will peak, before declining again, as is the industry’s annual trend.
Price of Propane
The domestic cost of propane has been outside of specific price peaks in recent years. Mont Belvieu propane prices plummeted to a low of $0.203 per gallon in early 2020. It has risen and dropped several times since then. Prices peaked at $1.491 per gallon in late 2021, then fell to around $1.123 in early 2022.
According to forecasts, propane prices might reach $2.57 per gallon by 2022. As a result, propane-heated families in the United States would likely face a 54 percent increase in their heating expenditures by 2022. In a really cold winter, they could spend up to 94 percent more, but in a mild winter, they could only spend 24 percent more.
Supply Chain Factors
A decline in natural gas and crude oil production is one potential supply chain problem for propane production and exports. Propane is produced as a byproduct of natural gas processing and, on rare occasions, crude oil refinement. The global demand for petroleum and natural gas has decreased as a result of the COVID-19 epidemic, which has resulted in travel limitations. The inevitable result is a reduction in propane output.
As employees quarantine because to the ongoing COVID-19 outbreak, propane suppliers may see a reduction in their workforce. Reduced supply chain productivity may result in lower overall propane output.
Cold winter weather can also cause supply chain problems if demand is higher than projected and supplies are depleted.
Increasing Demand for Propane As a Clean Source of Heating and Cooking Fuel
As customers seek cleaner residential energy sources, demand for propane is expected to expand both domestically and abroad.
Demand for propane increased during the COVID-19 epidemic as people went into lockdown or started working from home. More time spent at home has often resulted in more cooking possibilities and a greater need to keep the house warm and pleasant. Propane appeals to these users as a clean, responsible, and high-quality fuel source.
Increasing Demand for Propane As an Automotive and Transportation Fuel
Through 2022, growing demand for propane will be driven by consumer demand for cleaner fuels.
In Asia-Pacific countries, demand for propane as an alternative automotive and transportation fuel is particularly considerable. Increased air pollution levels, particularly in China and India, have sparked a boom in interest in greener fuels. A thriving autogas market has emerged in China as a result of several municipal clean-air efforts pushing alternative fuels. As a result of this market, there are more prospects for propane imports from other countries.
Increasing Demand for Low-Emission Sustainable Fuels
The fact that propane emits very little carbon fuels a lot of interest in it as an automobile and transportation fuel. Propane is a considerably more environmentally friendly option than gasoline.
Because of propane’s lower emissions, many governments and school districts in the United States have begun to move to propane-powered cars. In West Virginia, propane-powered school buses cut carbon emissions by 13% and dangerous nitrous oxide (NOx) emissions by 95% to 96% when compared to diesel buses. There were 25,969 propane-fueled fleet vehicles on the road in 2017, including police cars, school buses, lorries, taxis, and shuttle buses.
The negative effects of diesel fumes on schoolchildren’s health have been established in research, demonstrating that propane is likewise safer from a health standpoint.
Fuel economy is one of the potential drawbacks of using propane autogas. Because a gallon of propane has less energy than a gallon of conventional gasoline, vehicles must consume more propane to attain the same mileage. However, the advantages of propane-powered cars frequently exceed the disadvantages.
Propane, for example, has an octane value of above 120, whereas gasoline has an octane rating of 84 to 93. Some propane car manufacturers tweak their engines to get the most out of the higher octane rating, which improves performance and efficiency. Propane cars have reduced carbon emissions and are more resistant to oil contamination, resulting in lower maintenance costs, less time spent on maintenance and repairs, and longer engine life.
Propane autogas is becoming increasingly popular around the world. Some governments encourage the use of propane-powered vehicles by providing tax breaks and incentives for low-emission automobiles.
When is the best time to purchase propane?
Fall officially begins this week, and despite the uncharacteristically mild weather we’ve had in the Hudson Valley in recent weeks, there’s no disputing that crisp days and nights are on the way in the not-too-distant future.
That makes now, in late September and early October, an excellent time to schedule your next propane supply, among other things.
Why? There are four major causes for this:
- There is a lack of demand. Propane prices rise in response to increased demand, which is strongest when temperatures drop. Propane prices might also rise during the summer months, when people pack up their campers and RVs for a vacation or camping trip. Early fall is a “shoulder season” between these peak demand times, which means it’s frequently the greatest time to save money on propane tank refills.
- The weather has been more consistent.
- Sudden cold spells are prevalent in late autumn and early winter, but occur less frequently in the early fall.
- It assists you in remaining prepared.
- Extreme cold can quickly cause propane shortages, resulting in no-heat situations as people rush to fill their tanks. Cold weather can sometimes cause power outages, necessitating the use of propane to keep your family safe and warm. You’ll have piece of mind knowing that your family will be secure in any weather if you schedule your propane tank refill in the early fall.
- You will have all of the conveniences of home.
- You’ll be counting on gas to bring home comfort throughout the heating season, whether you’re firing up the propane grill for a game, lighting up your propane fireplace for a warm evening at home, or turning up the propane spa for a cold night bath. Fill your propane tank immediately to ensure that you’ll have comfort for months to come.
What does propane’s future hold?
With severe outages in the Texas electrical grid, hackers launching a ransomware attack on a major pipeline, and alarming news about climate change, the future of energy in the United States is a topic worth considering.
As a result, propane has proven to be an excellent alternative energy source for Americans now and in the future. The propane sector is well-prepared, and it is continuing to prepare, to handle today’s issues, as well as to innovate in order to address tomorrow’s prospective, looming challenges.
Securing Our Energy Future
Propane usage in the residential sector has been rapidly increasing. Throughout the United States, current real estate booms and home construction patterns will undoubtedly lead to more homes with propane equipment such as heating systems, ranges, water heaters, and laundry dryers. New homebuyers continue to prefer propane gas over other energy sources because of its efficiency and convenience. Many people are also opting to switch their existing home heating systems from electric to propane. It’s not surprising, considering that households that use propane instead of electricity can cut their greenhouse gas emissions by nearly half.
Based on these projections, propane demand in the United States is predicted to exceed 10 billion gallons per year by 2025.
The propane business has the potential to meet our country’s energy needs while also supplying domestic energy that is not reliant on imports or the old and failing infrastructure of utilities.
Propane: A Cleaner and Greener Energy Source
The propane business is addressing two significant issues at once: meeting rising demand for cleaner fuel and preventing climate change.
Propane’s use as a transportation fuel is one of the most important ways it may assist lower the country’s greenhouse emissions.
Over the next five years, the demand for propane autogas is predicted to skyrocket. The introduction of autogas to school buses resulted in a 960 percent rise in the number of school buses utilizing this fuel, and autogas demand is projected to continue and extend into other sectors.
Package and parcel delivery services are one area poised for expansion, as demand for home delivery skyrocketed during the COVID-19 pandemic. Because of the simplicity and convenience, many individuals are continuing to use delivery services for everything from takeout to household necessities now that the limitations have been lifted. The more of these fleets switch to autogas, the more greenhouse gas emissions will be reduced.
Renewable energy also has a big influence on the environment since it reduces our reliance on fossil fuels. Drilling for oil or fracking for natural gas, for example, emit extremely toxic and harmful emissions that can impact ecosystems, soil supplies, and water quality.
Renewable propane is a byproduct of the renewable diesel process that has recently been developed in Europe and North America. Biomass, animal fats, vegetable oils, and triglycerides are all good sources of renewable propane. Renewable propane helps to meet the rising demand while also lowering the environmental impact.
Take advantage of the security, comfort, and convenience that propane provides now and in the future. Become an Advanced Propane customer now and let us show you how we can help your house or company in Tennessee or Southern Kentucky!
How much does propane cost in Ontario?
Prices for LPG are shown for the period 21-Feb-2022 to 30-May-2022 in Canada. During that time, the average value for Canada was 1.22 Canadian Dollar, with a low of 1.09 Canadian Dollar on February 21, 2022 and a high of 1.28 Canadian Dollar on April 18, 2022.
What is the current propane price per gallon?
The current propane price per gallon is higher than the same period last year. This means that propane costs are anticipated to climb throughout the United States over the winter season, and home propane budgets will have to account for higher propane pricing now. The current propane price of $2.337 per gallon merely represents an average propane price; you may pay more or less for propane based on your usage and region. However, it serves as a solid benchmark for today’s propane pricing per gallon.
What is the source of propane scarcity?
LOS ANGELES, CALIFORNIA, UNITED STATES (NewsNation Now)
Due to the coronavirus epidemic, outside dining prohibitions have become a factor tied to propane cylinder shortages and a large increase in demand.
For a house, how long does a 250 gallon gas tank last?
Winter heating is mostly accomplished using 250-gallon propane tanks. You can heat the entire house with a 250-gallon household tank. The most important question here is:
Here’s a quick answer:
A 250-gallon propane tank can last anywhere from 26 days to 7 months and 2 days depending on usage. That’s a really broad range. The utilization of a 250-gallon propane tank determines its longevity (how much propane per day you burn). This is related to the size of the house you want to heat with a 250-gallon propane tank in an indirect way.
You must evaluate how long a household propane tank will last if you intend to use it for heating. There are two methods for calculating this (we’ll use both later on), namely:
We must also consider that a full 250-gallon propane tank carries 200 gallons of propane. The 80 percent limit applies to all home tank sizes as a safety precaution.
Let’s start by looking at how to figure out how long a 250-gallon propane tank will last for heating purposes using heating demand. After that, we’ll see how long this tank will last for dwellings of 500, 1000, 1500, 2000, 2500, 3000, 3500, and 4000 square feet:
What is behind the rise in propane prices?
Increased propane prices can be aggravating and even painful at times. But try to rest easy knowing that propane is still one of the most cost-effective options to heat your home and power your appliances. Propane accomplishes all of this while lowering carbon emissions.
Furthermore, historical trends have proven that what goes up must come down when it comes to prices. It’s only a question of when. The feeling among the local propane companies, as well as the industry in general, is that the sooner the better.
Propane Price Swings Are More Moderate than Oil
You may have noticed that when compared to heating oil, gasoline, and other fuels generated from a barrel of crude oil, price swings with propane are more moderate. According to state data published at the end of March 2022, the retail price of propane is 27 percent more than a year ago, while the retail price of heating oil is up 76 percent.
Electricity is also not cheap. With an average retail price of 19.50 cents per kWh, New York is among the top ten states with the highest average retail price of electricity in the residential sector. To put that in context, the average electricity rate in the United States is 13.75 cents per kWh.
Propane: A Domestic Form of Energy
One of propane’s advantages is that it is a wholly domestic energy source. In fact, the United States exports roughly twice as much propane to the rest of the world as it consumes domestically.
Despite the fact that propane is still valued on the global market in the same way that oil is, the quantity of domestic North American production ensures supply stability and helps to temper pricing in the United States.
Crude oil, on the other hand, is still an imported product, even if we produce a lot of it here, and we still obtain it from certain countries who don’t like us very much.
Supply and Demand
A common factor for higher propane pricing is a mix of high demand and lower-than-average inventory. While you may associate propane with home heating and appliance use, it has a much broader application.
For example, due of its increased use as a petrochemical feedstock, the great majority of which are sourced from crude oil and natural gas, global demand for propane has surged. Many end products, such as plastic, paper, glue, and detergents, are made from these petrochemicals. The main users of propane are petrochemical companies.
According to the Energy Information Administration, despite rising U.S. prices, global demand for U.S. propane has remained stable since foreign prices for propane and other feedstocks have also climbed.
Here are a few more of the many variables that can influence the amount you pay for propane in the end.
Global Conflicts and Natural Disasters
When war, political unrest, conflict, or natural disasters such as tsunamis, earthquakes, or hurricanes strike other parts of the globe, crude oil and natural gas prices might be affected. Because propane is a by-product of both crude oil and natural gas, higher costs for these fuels affect propane pricing.
All energy prices were rising before the commencement of the war in Ukraine in late February, in anticipation of possible penalties against Russia’s energy industry if the country attacked Ukraine.
Russia wields power as the world’s third-largest producer of petroleum and liquid fuels, trailing only the United States and Saudi Arabia. It is a major crude oil and natural gas exporter.
Even the possibility of an interruption in energy supplies will have a significant impact on commodity traders’ purchasing and selling decisions. This is known as the fear factor in the frantic world of investment.
When Russia invaded and the US imposed an embargo on Russian imported oil and petroleum products, with other nations anticipated to follow suit, it created a huge energy hole that needed to be filled. Those who earn a living on the energy markets don’t like it when things are uncertain. This comprises both speculators wagering on price movements and hedgers reducing risk for their clients involved in oil production or consumption.
Propane Exports
Many people are unaware that the United States is a major propane exporter, and that business is growing. This is beneficial for the big wholesale propane providers, but it raises demand even more in an industry that doesn’t typically hold large amounts of propane at once. Many propane providers are compelled to deliver the amount of propane they’ve agreed to export, leaving even less propane available for domestic use.
Weather Extremes
A scarcer market develops when supply is reduced during a period of strong demand, such as the winter months. When a cold spell is particularly severe or lasts longer than usual, the scarcity is exacerbated. People may begin to panic buy, as we witnessed with the toilet paper scarcity at the outset of the pandemic.
It isn’t just chilly weather that can drive up propane usage. During the agricultural growing season, heavy rains result in abundant harvests that must be dried quickly and in large quantities. Propane is one of the fuels used to dry crops. Propane usage in corn-producing states normally increases during the corn harvest in September and October, followed by a higher increase in January due to space-heating needs.
Other Factors That Influence Price
Long-term considerations such as proximity to supply, transportation constraints, energy legislation, and industry patterns have all influenced where propane prices move. These concerns have also surfaced more recently:
- The cost of transporting fuel has increased.
- COVID-19-related workforce concerns have resulted in additional costs.
- Shortages have resulted from supply chain issues, causing shipment delays and higher prices for supplies, parts, tanks, and other resources.
What Comes Next?
We don’t know where things will go from here, but if history is any indication, we may expect big price drops in the not-too-distant future. Nothing will make your local propane company happier than a return to regular costs.
Until then, put your faith in your propane supplier, and let’s hope that, regardless of what happens with energy prices, we’ll soon be living in a more peaceful world.
How long would 500 gallons of propane keep you going?
The 500-gallon propane tank is the most frequent of all the residential propane tank sizes. When the cold weather arrives, you should at least know how long a 500-gallon gas tank will keep a house warm.
Here’s how it works:
A 500-gallon propane tank can last anywhere from one month to fourteen months and four days. Check the chart and graph for different sizes of homes further down for accurate times.
During the winter, the average US household uses roughly 750 gallons of propane. That means the average US household will require two 500-gallon propane tank fills per winter (500-gallon tank holds a maximum of 400 gallons of propane; the 80 percent safety rule).
We’ll take a deeper look at a 500-gallon tank’s lifespan. This will allow us to more precisely determine how long 500 gallons of propane will last in homes varying in size from 500 to 4,000 square feet.
To determine how long a 500-gallon propane tank will last in your home, we must consider the following factors:
- Your home’s size. Larger dwellings demand more heating, and a 500-gallon propane tank will run out sooner than a smaller tank.
- criteria for heating (location). Houses in the north of the United States demand more BTU heating than houses in the south. For instance, in Texas, a 500-gallon propane tank will last longer than in Chicago.
- What is the severity of the winter? We will burn more propane in hard winters than in mild winters. According to the data for average US home winter use from 2010 to 2016, the 2013-2014 winter was the hardest, with an average usage of 830 gallons of propane compared to 750 gallons on a typical winter.
- Your propane-powered heating units’ energy efficiency. For example, high-efficiency propane furnaces with an AFUE rating of greater than 90 will use less propane to produce the same amount of heat than furnaces with an AFUE rating of less than 70. A 500-gallon propane tank will last longer as a result.
- The maximum propane tank capacity is set at 80%.