U.S. heating demand is set to more than offset propane consumption losses in the petrochemical sector, lifting total propane consumption by 50,000 barrels per day (Bpd) this winter.
The forecast came from the U.S. Energy Information Administration’s (EIA) Short-Term Energy Outlook (STEO) last week. The report estimates that domestic propane consumption during the heating season – October through March – will average 1.13 million barrels per day (Mmbpd).
Heating demand will drive the growth, as lower temperatures are expected this winter. Propane heats around 6 million households in the U.S., which accounts for roughly 50% of the total propane consumption in the country, Kallanish Energy notes.
The EIA sees demand in the Northeast increasing 8% compared to the last heating season, and by 5% in the Midwest. Covid-19 restrictions are increasing residential consumption, as more people spend more time at home.
Meanwhile, propane production is expected to decline by 144,000, to average 1.56 Mmbpd. Yet, the EIA sees plenty of supply in the market to balance out the higher demand and lower output, with stocks estimated to be above the five-year average in most regions.
This post appeared first on Kallanish Energy News.