Market Snapshot: Canadian propane inventories ready for winter
Release date: 2022-11-09
PropaneDefinition* is mainly used in Canada for space heating in buildings, and propane inventories ensure that surplus summer propane production is stored to meet increased demand during the winter. Bulk inventories of underground propaneDefinition* in Canada were at 11.6 million barrels on 1 October 2022, a 9.2-million-barrel increase since April. Inventory levels were roughly in line with the five-year average inventory level of 11.8 million barrels.
On a regional level,Footnote 1 7.5 million barrels were stored in western Canada, and 4.0 million barrels were stored in Ontario. Western inventoriesFootnote 2 were slightly above the five-year average of 7.3 million barrels, while Ontario inventories were slightly below the five-year average of 4.5 million barrels.
Figure 1: Underground propane inventories in Canada
Source and Description
Description: This interactive line chart shows beginning-of-month underground propane inventories in western Canada, Ontario, and Canada as a whole. The graph for each region illustrates underground inventories for 2022 (January to October) and the five-year (2017-2021) average.
In Canada, inventories were at a low of 2.3 million barrels in April and increased to 11.6 million barrels by October. The five-year average for October is 11.8 million barrels.
In western Canada, inventories were at a low of 2.0 million barrels in April and increased to 7.5 million barrels in October. The five-year average for September is 7.3 million barrels.
In Ontario, inventories were at a low of 384,000 barrels in April and increased to 4.0 million barrels in October. The five-year average for October is 4.5 million barrels.
Propane is stored (injectedDefinition*) in bulk in underground caverns during the warmer summer months, when production exceeds demand. It is withdrawn in the colder winter months, when demand exceeds production. Withdrawals of propane generally start to exceed injections in October, with the October to April period commonly referred to as the “heating season,” until propane stocks reach a minimum at the end of the season in April.
Winter weather is the largest uncertainty for propane demand. If it is very cold, propane demand could be a lot higher, placing pressure on inventories. Sufficient inventory levels provide a safeguard against very cold wintersFootnote 3 and other propane supply disruptions.Footnote 4
Propane is also stored above ground in bullet tanksDefinition* in communities closer to end-use markets. These tanks enable quick loading of propane onto trucks for delivery to consumers. The vast majority of propane storage capacity in Canada is underground.
The CER collects and reports monthly underground propane and butane storage information in Canada. In the U.S., storage data is collected and reported by the Energy Information Administration.Footnote 5
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