Slide 8 of 28
Notes:
- Much of the propane used in the residential sector during the winter is for heating. Thus, the severity of the winter can have a large influence on residential/commercial demand.
- A large percentage of winter demand is generally supplied from stocks ( 20% on average during the peak demand months of December, January, and February), so with low winter demand, stocks were not drawn down as much as usual.
- This graph shows one of the major residential propane-consuming regions -- the West North Central census region. It shows that the most recent winter 1998-99 relative to average was generally warm.
- But note January 1999 at the peak. January 1999 was much colder than the prior month, December 1998, and colder than January 1998. As I will show later, primary storage experienced a large stock draw in January 1999, which is partially explainable by the brief cold weather.
- This chart also shows how the winter of 1996-97 started out quite cold, contributing to a large price increase at the end of 1996. The winter of 1997/98 started similarly through November, but quickly became relatively mild.
- With the end of winter 1997/98 being mild and the beginning of winter 1998/99 also being warm, we would expect the calendar year 1998 to have been warm.
