Propane prices down due to overproduction and warm winter

Winnipeg – Last winter’s mild temperatures and large propane supply have helped to lower the price of the fuel.
Customers in most parts of North America are paying the cheapest prices in two years.
Phil Flynn, an energy analyst with The Price Futures Group in Chicago, Illinois, credits the onset of shale fracturing in the U.S. for the price-drop along with Mother Nature.
“A lot of it has to do with the shale revolution and the demand situation trailing off a little bit. This has caused the propane market to be very well supplied,” he explained.

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Flynn says last winter’s mild temperatures also helped to build up massive propane stockpiles throughout North America. In a few cases, retailers were forced to pay truckers to haul old supplies away, just to make way for newer contracted deliveries.
Just a few years ago, complaints were rampant about pipeline problems, a lack of trucks to properly move supplies and other issues.
“We were selling (propane), just a few years ago, at five bucks (per gallon); now you can get it for a dollar a gallon,” said Flynn.
The situation was similar for customers in Winnipeg and Regina during the early part of 2014. According to the Canadian government’s average retail prices for fuel chart, propane users in Regina were paying C$1.58 a litre at one point (March 4, 2014) while Winnipeggers were shelling out $1.69 (Feb 11, 2014).
Now, Regina retail prices were about 98 cents a litre July 14, Prices in Winnipeg were on average 80 cents.
One western Canadian farm group head said the savings will be felt by producers still using trucks with a propane hook-up, or by those who use propane for irrigation projects.
“There is still some irrigation-pumping units using propane that don’t have access to electricity or natural gas. Places where guys are putting units in along a lake or river that they’re pumping out of,” noted Lynn Jacobsen, president of the Alberta Federation of Agriculture.
Flynn adds he doesn’t see how propane prices will go back up significantly unless there is a major, unforeseen event.
“I think some time of a weather event, intense hot streak in the summer, or some kind of other weather event that can disrupt production,” he said.