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Good morning. Another week, and more volatility on the energy market horizon.
First, let's take a look at where propane's value is compared to crude oil:
As you can see from where we closed this past Friday, on the far right, propane's value to crude is hitting multi-year lows. Conway's value to crude on Friday (using the daily average price of propane compared to the closing value of crude oil) was 26.22%. That is the lowest total we have seen since 2019, and TET's 29.51% is its lowest value compared to crude since January of 2020. Propane's flat price values did hit some local highs in March, hitting levels not seen since March of 2025, but relatively speaking, propane is still incredibly cheap compared to most other hydrocarbons. Given that propane inventories remain at all-time highs with no end in sight to increased propane production, the only upside risks for propane will be through the price of crude oil. Which, that is a very real risk:
On the weather side, El Niño conditions are beginning to build in the equatorial Pacific. These trends are expected to continue all summer and into the fall. Strong El Niños often lead to milder winters in North America, whereas weak or Modoki El Niños can bring about colder-than-normal anomalies in the eastern half of the USA. But we are way too early to dig into any fine-tuning for next winter.
