Cold helped push demand for propane

Wintry weather spreading across much of the U.S. helped drive the highest demand for propane in weekly government data going back to 2004.

While cold fronts typically boost consumption for heating fuels, this year is different. Last month, a similar arctic blast in Asia and Saudi Arabia’s oil output cuts created a squeeze for the fuel and led to a surge in U.S. exports.

The stronger demand could boost prices for home heating, make it more expensive to produce plastic and curb exports. Propane production has risen in recent years as the fracking boom sent oil and natural gas production skyrocketing and turned the U.S. into a net energy exporter.

Last week, demand of propane and propylene surged to a record 2.2 million barrels a day, according to Energy Information Administration data. That pushed propane supplies to the lowest point in nearly two years.

Demand for propane has also increased because of rising petrochemical production.

This year, the propane market may also have an additional source of demand: outdoor dining.Many cities have increased outdoor dining capacity with the use of propane heaters.

Spot propane prices in Mont Belvieu, near Houston, traded at 87 cents per gallon Wednesday, data from DTN Energy shows.

Last month, prices surged to 96.75 cents, the highest since October 2018.