The petrochemical sector is more flexible in its need for propane and tends to buy it during the spring and summer, when prices decline. If producers of petrochemicals should have to depart from this pattern for some reason, the coinciding demand could raise prices. And when prices rise unexpectedly, as they do sometimes in the winter, petrochemical producers pull back, helping to ease prices. Prices could also be driven up if agricultural sector demand for propane to dry crops remains high late into the fall, when residential demand begins to rise. Data are not adjusted for inflation.
Primary storage consists of refinery, gas plant, pipeline, and bulk terminal stocks.
Primary inventory withdrawals provide the second largest source of propane during the winter heating season, the largest source being production from natural gas plants and refineries. Propane storage facilities at the primary level are generally located near the major production and transportation hubs and consist of pressurized depleted mines and underground salt dome storage caverns clustered mostly in Conway, Kansas, and Mont Belvieu,Texas. The reservoirs are linked directly to the major natural gas liquids pipelines and are capable of maintaining high deliverability rates during peak demand periods. Secondary storage consists primarily of large, pressurized above-ground tanks located at approximately 25,000 retail dealers scattered throughout the United States. Tertiary storage consists of small above-ground tanks located mostly at residences and commercial establishments.