Wednesday, 11 October 2006 00:38

Propane Prices: Are They Heating Up?

Energy InformationThe mornings are cooler, the daytime highs lower and as winter approaches the use of heaters and the fuel that powers them starts to become a household issue here and around the country. How does Amador County fair against the rest of the nation and our neighbors? Well, we like our neighboring counties, tend to be above the national average. According to the Energy Information Administration, the average price of propane nationwide is $1.93 per gallon, 20 cents higher than this time last year. The average prices in Amador County hover around the 2.25 cent range and according to local experts, we can expect that to rise.

According to Kamp'sThe US Federal Department of Energy reported last week that propane prices throughout the country have dropped because of substantial supplies of propane, but also warned that prices could jump if winter turns unusually cold anywhere in the United States and the weather, in turn, drives up the need for propane and natural gas. Winter demand, as well as today’s production drop by OPEC will have an impact on the local propane market according to a local Kamp’s propane spokesman. According to Kamp’s, local prices have been steady throughout the summer months, however wholesalers experienced a price increase last week and that will make future propane purchases by local suppliers higher in the future. The increase is then passed on to consumers. The price of propane, like that of other petroleum products, is based on supply and demand. U.S. propane inventories as of Sept. 29 reached an estimated 70 million barrels, the highest pre-heating season level since 2002, the EIA report said. Overall, propane inventories appear adequate in most of the major regions of the nation at this time. The highest inventories are in the midwest, the lowest on the East Coast. From March to September, about 40 million barrels of propane were added to the nationwide supply, just slightly above the 5-year average of 39.1 million barrels for this same time period. Neil Gamson, an EIA analyst, said it's too early in the winter heating season to predict what the costs will be. "We think crude oil and heating oil prices are going to head back up from where they are now as the heating season begins," Gamson said. The local Kamp’s representative agrees. Winter demands generally lead to higher prices.

U.S. Propane Inventories From March to September Neil Gamson