Slide 18 of 28
Notes:
- The answer to the question of high stocks is that EIA believes they were due to a market cycle of weak demand and growth in new supply.
- These are natural outcomes of an excess supply cycle. But the dynamics will move to eventually remove the excess:
- While in the short-term, supply projects underway will be completed, other longer-term projects will be postponed until the price situation looks more favorable.
- The price incentive encourages more petrochemical use of propane. Eventually the demand increases will help to bring production and demand back into balance, and the price will increase.
- The high stocks in 1998 were no more of structural change than were the low stocks in propane or petroleum products in 1996.
