In-brief analysis
October 7, 2025
The United States is well stocked with propane heading into the winter. For the week ending September 26, U.S. propane inventory was 103 million barrels, about 13 million barrels more than the previous five-year average for this time of year, based on data in our Weekly Petroleum Status Report.
Propane inventories reflect supply and demand balances. Propane demand is greatest in the winter months because propane is used as the main heating fuel in about 5% of U.S. homes, primarily in the northern parts of the Midwest and Northeast. For propane supply, propane gas plant production increased 5% in the first seven months of this year compared with the same period in 2024.
U.S. propane inventories typically increase from April through September, when there is less demand, and decrease from October through March, when there is more demand. This year, weekly U.S. propane inventories have been above previous five-year averages since late May.
The Gulf Coast, where most U.S. petrochemical consumption and propane export capacity are located, accounts for about 70% of U.S. propane storage capacity. Propane inventories in the Gulf Coast region are at 61 million barrels for the week ending September 26, about 21% higher than the five-year average.
In the Midwest, where propane is more commonly used for residential space heating needs, propane inventories began October at 27 million barrels, about 4% more than the previous five-year average for that region. In some years, Midwest propane inventories can be affected by grain-drying demand, especially for corn. The U.S. Department of Agriculture expects that this year’s corn crop will be harvested slightly later than the 2020–24 average, which may require more propane for grain drying. Grain-drying demand typically draws on Midwest inventories in late October and early November.
Inventories grew quickly earlier this year because of growing domestic propane production, particularly in the Gulf Coast region. This production growth outpaced international demand for U.S. propane exports, which have increased slightly throughout 2025, despite changes in tariffs that affected propane export volumes earlier in the year.
Data source: Bloomberg, L.P.
Inventory levels affect prices. Propane spot prices on the U.S. Gulf Coast have declined largely because of strong inventory builds this storage injection season. The propane spot price at Mont Belvieu, Texas, averaged $0.70 per gallon in the week ending September 26, or $0.19 per gallon lower than in the first week of April.
Although market events such as prolonged, severe winter storms or geopolitical developments could put pressure on spot propane prices this winter, relatively robust U.S. propane inventory levels could mitigate spot price volatility that can arise from sudden increases in demand or disruptions to supply chains.
Principal contributor: Josh Eiermann
