www.fueloilnews.com | FUEL OIL NEWS | NOVEMBER 2014 15
for crop-drying. Propane consump-
tion in corn-producing states typically
rises in September and October with
the corn harvest, followed by a larger
rise related to space-heating needs in
January.
The weather influences both the
moisture content of the crop and
when it reaches maturity. If weather
is favorable, farmers may let their
corn dry in the field, especially if
there is not a price incentive to get
it to market right away. Last year,
propane demand in the top five corn-
producing states increased in October
to levels that rivaled the normal peak
demand in January, drawing down
propane inventories before the heat-
ing season began. Propane inventories
in the Midwest were drawn down by
4.1 million barrels (130,000 bbl/d)
in October, which was the largest
October stock draw since 1985.
As a result, Midwest inventories
of propane started the heating season
at relatively low levels and remained
at the bottom of the five-year range
through December. Logistical prob-
lems, including the closure for main-
tenance of the Cochin Pipeline that
transported propane from Canada
to the Upper Midwest and disrup-
tions of rail transportation, pre-
vented Midwest inventories from
being replenished before winter
began. With prolonged cold weather
in January and February, propane
inventories dipped well below the
five-year range.
Midwest propane inventories are
higher going into this harvest sea-
son. As of Sept. 26, inventories were
above the five-year average and 3.7
million barrels higher than year-ago
levels. However, recent infrastruc-
ture changes may affect propane sup-
plied to the Midwest in the com-
ing months, especially under high-
demand conditions. The Cochin
Pipeline was reversed earlier this year
and now moves condensate from
the Midwest to Canada. However,
at least some of these supplies will
be replaced by additional supplies
from several existing pipelines that
move propane north from Conway,
Kansas, to the upper Midwest, as
well as by expanded rail and storage
capacity in the region.
Source: U.S. Energy Information Administration
