The prices of propane, a popular commodity, are at an all time high. It is very strange when you look back in history at how propane was formerly used as a waste product and simply burned to get rid of the extra. Propane used to be a very cheap source to heat the home, however, prices are on the rise, and many people nationwide are turning to electric heating in the winter.
Propane has many uses, including heating, cooking, and working other home equipment such as your clothes dryer. Furthermore, propane can be used for farms to dry the crops, and as a fuel for transportation. Also, for cosmetics, fiber and plastic it is being used often as a raw material. Propane is either found in crude oil, or as a raw natural gas. It liquefies easily with only a very small amount of pressure. We use it in the liquid form, as it takes up very little space as a gas compared to oil. Propane is only made as a by- product, and not used for the sake of itself. If there is a large production of natural gas, then there is also less propane produced and available. When there is less propane available, propane futures prices will rise. At this moment, the inventory of natural gas is very high since there have been a couple of mild winters in the past. This in return means that there is less propane being produced and available.
About 17 percent of propane a year is from importing. The United States gets the majority of its propane either by rail car or pipeline, from Canada. Other countries transport it as well by sea, including Saudi Arabia, Norway, Venezuela, United Kingdom, and Algeria. The price of imported propane continues to rise due to the Chinese using propane more often than in the past as well.
Propane prices tend to rise and fall according to the prices of crude oil. Crude oil is very expensive right now, bringing up the rates for propane as well. Propane prices also tend to vary as the seasons change. We use far more propane when it is cold outside, especially residential uses. The inventory we have available for propane is rather low at this point, causing an alarming spike in prices. If the weather is unusually colder than we are used to, then this could cause a spike in price earlier than usual. Partially because we need to make sure that we have enough of a supply to last the entire winter. If the colder than average temperatures happen early in the season, there is a chance of running out of the propane supply. This will cause prices to spike as well.
The best option available for you is to make sure that your propane tank is filled before the winter season hits, and the prices rise. During the summer months, you can find better rates. It is very rare that propane prices will fall; they are always on the rise. If you are looking to lock in a rate, it is best to do so in the fall; prices will be lower. Prices may increase in the fall if there are major events such as hurricanes, so you need to be on the lookout. Making smart propane choices will help you avoid the constantly rising costs.
