Thanksgiving
The Pilgrims celebrated a good harvest in 1621.
The Mayflower Compact.
They had many reasons to “give thanks”. The year before, in early November, a strong Nor’easter knocked the Mayflower off course, pushing the ship to the west and forcing it to land at Provincetown, MA instead of Virginia. That change of plans raised questions about jurisdictional authority versus individual liberty, creating discord among the settlers (nearly half Pilgrims, half “strangers”).
A new contract for self-government was drawn up to maintain a lawful, functioning community.
Later called the Mayflower Compact, its purpose was to maintain peace and order through an agreed-upon social contract that established a civil body politic, with just and equal laws, for the general good of the colony.
A month later, in December 1620, they sailed into Plymouth harbor. The winter was brutal, and nearly half of the 102 new settlers died from starvation, disease, and inadequate shelter.
Giving Thanks.
Challenging times can be divisive, whether they originate from the internal politics and diseases affecting the Mayflower settlers 400 years ago, or the contentious politics and tragic pandemic of today. But I think most people would agree that we live in an exceptional country, and despite the hardships we’re now facing, we still have abundant reasons to show our gratitude.
In the spirit of “giving thanks,” I’d like to list the top three propane-related things that I’m thankful for this holiday season:
#1. I’m thankful that monthly Mt. Belvieu, TX, propane prices have remained under $.58 per gallon for 18 months now. That’s 45 percent lower than the last “high water mark” ($1.0589/ in September 2018). Lower prices are easier on your customers and easier on your receivables.
#2. I’m thankful that the propane supply scare in April and May never materialized. Industry concerns regarding the possibility of inadequate propane supplies heading into this winter ebbed throughout the summer as world-wide demand destruction helped North American inventory levels grow, outpacing any drop in production.
#3. I’m thankful for our wonderful customers. Speaking on behalf of everyone at Ray Energy, we’re truly thankful for your business and grateful for the many friendships that we have together. You are like family to us!
What’s Happening with Propane Prices?
Up until the past few days, propane prices as a percentage of crude oil prices had been drifting up towards the higher end (56%-59%) of the recent historical range, most likely a reflection of greater export demand. What does that tell us?
Movement in the percentage of propane prices to crude oil prices often indicates the perceived strength or weakness of the Belvieu market, not necessarily price direction. In other words, propane prices are still likely to follow the price of crude oil up or down, but with greater or lesser enthusiasm.
Propane Price Chart
Weekly Inventory Numbers
U.S. propane inventories showed a draw of 2.00 mmbbls. for the week ending November 13, 2020. The draw came in on the high side of industry expectations, due mostly to export demand. That brings national inventory levels to 92.88 mmbbls., about 4 percent above last year and 6 percent ahead of the 5-year average.
PADD 2 (Midwest/Conway) inventories showed a slight build of .18 mmbbls. They currently stand at 26.35 mmbbls., roughly 13 percent ahead of last year.
PADD 3 (Gulf Coast/Belvieu) inventories showed a fairly strong draw of 1.94 mmbbls. They currently stand at 52.16 mmbbls., nearly 2 percent behind last year.
The Skinny
We have much to be thankful for in the propane world: monthly Belvieu propane prices have been under $.58 per gallon for 18 months now, and the North American propane supply scare in April and May never materialized, evaporating completely by August.
All of us at Ray Energy would like to wish you and your families a healthy, safe, and wonderful Thanksgiving!
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