Why are propane prices rising?Boni
Even in a normal year, propane prices fluctuate throughout the year. Typically following the demand, we see lower prices in the warmer months, increasing as demand increases in the colder months.
The year 2021 has been a most unusual year, resulting from the Covid-19 virus upset of the world’s economy. Propane demand has increased both here at home and abroad. In the US, when stay-at-home mandates have been in place, people have made more use of their homes and have done things to make their house more enjoyable. Even the small things like turning up the thermostats in cold weather and grilling our meals at home increase our propane consumption. However, the true culprits for these increasing demands, thus increasing prices, are higher crude oil prices, strong petrochemical interest, seasonal withdrawals from propane inventory, and increased global demand for US propane exports mainly to countries in East Asia.
This year, propane prices have been high all summer – roughly twice the price of the past two summers! As cold weather moves in, prices are increasing with no sign of dropping. Analysts have said prices may need to climb higher yet to discourage foreign buyers. Raymond James analysts boosted their price expectations, “As these dynamics continue, the US market would project to hit dangerously low propane inventories,” they said.
Naturally, these rising fuel prices are causing alternate power sources to be pursued.
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