The EIA announced a massive draw of 7.9M/bbls for the week ending January 24th, 2025. This might be the second-largest weekly draw on record; that is what I see dating back to at least 2013-2014, with the largest weekly draw for this period being 8.4M/bbls last January. Last January’s big draw should not be confused with the EIA’s mid-December 2023 inventory revision (we were all wondering the same thing until we checked the history).
Domestic demand was up by nearly 400,000/bpd, while production was down to 2.505M/bpd, the lowest weekly reported total for this season’s inventory cycle, dating back to last spring. Exports were reported at 1.828M/bpd.
There could have been larger weekly draws prior to 2013-2014, but I do not have the data on that. December 1989 was an incredibly cold month and if anyone has historical data back to those olden times, I’d love to see it.
Regardless, 7.9M/bbls is an incredible number, which brings overall inventories down to 66.2M/bbls. The 11-year average inventory for this week is 62.53M/bbls, so while current inventory levels are still higher than the 11-year average, we are now at a place that is not such an outlier to the high side, which could have some pricing impacts for the 2025-2026 supply season, in addition to concerns that global crude oil stocks are at all-time low levels.
When you consider the inserted Wheel of Supply and Demand graphic above, declining inventories and increased demand for barrels is when we can see upward price pressure. Propane is a small part of the overall petroleum complex, but when crude inventories are low and demand exceeds supply, that high tide can lift all boats.
Today’s video from BAM discusses their outlook for February and covers when the cold may return and where it will be oriented. There is a lot to digest from the video. Still, the big takeaway is that from about the first week of February through the first week of March, the Pacific Northwest and Northern California could experience consistent below-normal anomalies, while the Midwest and East will flip back and forth between below and above normals. However, the below normals will not likely be anything like what we experienced in January, at least based on current modeling
