Considering the pandemic, geopolitical pressures and the changing supply and demand dynamics, it’s no wonder you’re experiencing a level of price shock as you plan propane purchases for your home heating and agriculture needs.
While domestic consumption continues to mature, localized residential and commercial demand makes up only 20% of the total demand for American-made propane. An increasing component of market share, the international need for U.S. propane shipments, has conversely grown tenfold in the last 10 years. Or said in another way, propane exports on any given week can now account for as much as 80% of production! As global demand increases, propane production has struggled to keep pace with the new growth in demand, leaving inventories at tight levels.
Rewind beyond the previous two winter seasons, where supplies of propane were more plentiful and would quickly reach a surplus by early summer, yielding opportunities for cheaper seasonal values. Fast forward to, where suppliers instead have shifted focus to a growing, consistent, year-round source of business that is U.S. LPG Exports. Previous opportunities of seasonally depressed prices may just be component of the past.
Knowing that propane volatility is highest when supplies are at their lowest, what should you do? And how can you prepare? Follow these four tips to help protect yourself in this volatile market.
- Proceed with caution
Based on the many unpredictable factors impacting propane prices today, holding out for a low-cost summer fill could leave you waiting for a seasonal price drop that may never come.
- Lock in your gallons early
Instead of waiting for low prices, plan ahead. Some Cenex® propane retailers will give you the option to lock in your gallons months in advance. Ensuring that you have supply has become increasingly important. Know your propane needs and share them with your Cenex branded propane provider so they can help secure enough supply when you need it the most.
- Talk with your local Cenex propane retailer about tank monitor options
Your retailer may provide technology to help you monitor your propane tank. With the ability to monitor your supply and the use of any available keep-fill services, you and your propane provider can assess your needs in real time to protect against the risk of running empty.
- Stay in close contact with your propane provider
Above all else, a strong relationship with your propane provider is key. Understand the offerings that are most applicable to your propane needs and keep your propane retailer updated with changes that may impact your propane usage.Your propane retailer is the first line of defense in protecting yourself in the ever-changing propane market.