PROPANE PRICES ARE HEATING UP
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because of limited oil supplies from OPEC+ countries. Based on the most recent winter forecasts, it is assumed temperatures for the winter of 2021–22 will be slightly colder than last winter for the midwest and more similar to the average winter of the previous 10 years. Cold Approximately 5% of all U.S. weather can affect household heating expenditures in households heat primarily two ways. First, it raises the amount of propane required with propane. The U.S. Energy to keep a house at a specific temperature. Second, because Information Administration it raises demand and could cause supply disruptions, cold (EIA) expects the average weather can cause propane prices to rise, a development Pat McGonagle household bill for propane that can be more acute in a time of low inventories. consumers will rise this winter. The higher price follows changes to energy supply and demand patterns in Fuel expenditures for individual households are response to the COVID-19 pandemic. The EIA expects highly dependent on the size and energy efficiency of households across the United States will spend more on individual homes and their heating equipment, along energy this winter compared to the past several winters with thermostat settings, local weather conditions and because of higher energy prices, lower inventory levels market size. Visit our website myenergycoop.com/save and the assumption of a slightly colder winter compared to review our energy savings tips before the cold weather to last year. EIA defines the winter season as the period arrives and learn ways to become more energy efficient. from October through March. As we head into the winter of 2021–22, retail prices for energy are at or near multiyear highs in the United States.
Factors Affecting Propane Prices As of October 15, 2021, wholesale propane spot prices at Mont Belvieu, Texas, the main U.S. propane hub near Houston, averaged $1.45 per gallon(g) as compared to $.53/g on October 15, 2020. This represents an increase of $.92/gal (174%) year over year. Residential propane prices this winter are projected to be the highest since the winter of 2013–14 as changes in wholesale propane prices pass through relatively quickly to retail propane prices.
How we price propane
NGO Propane adheres to a detailed planning model throughout the year. The Cooperative works with two Propane inventories typically build between April and suppliers to secure both price and physical transportation October before drawing down in late-September or of the product throughout the summer months to ensure October when agricultural use of propane rises and we can meet our members needs during the upcoming temperatures begin to fall. U.S. propane inventories winter season. We continue to focus on providing at the end of September were 20% less than the five- affordable fixed-price propane with metered service. year average and 29% less than at the same time last Our metering option allows members to pay for only year. The low inventories are primarily the result of the propane they use each month and avoid costly tank increased global demand for propane, relatively flat U.S. refills. Please call our office at 1-800-255-6815 to discuss propane production and low global propane production your propane options.
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