Propane prices retreat but still are unusually high; distribution troubles mount [View all]
Source: Omaha World Herald
By Russell Hubbard
Disruption continues in the market for propane gas, the heating fuel for thousands in Nebraska and Iowa, with higher-than-normal prices, long waits for truckers at distribution hubs and no relief in sight from Mother Nature.
Prices began to rise dramatically — 70 percent over one weekend — late last month. Reasons included a fierce cold snap depleting inventories that were already low from heavy fall use by farmers drying crops; curtailed pipeline capacity due to maintenance and conversion of the lines to carry other fuels; and higher exports in 2013.
This week, propane at the Conway, Kan., hub was quoted at an average wholesale price of $2.45 a gallon, down by more than half from about $5 a gallon in late January, but still a little less than three times the 85 cents a gallon quoted a year ago. Prices at the Kansas hub serving the Midwest are at about a 92-cent premium to those at Mont Belvieu, Texas, the U.S. propane distribution and storage point for the Southern United States.
A year ago, the spread between the Midwestern and Southern hubs was only about 3 cents, the big jump illustrating the shortage and high prices in the nation's center.
FULL story at link.
Read more: http://www.omaha.com/article/20140204/MONEY/140209553/1697#propane-prices-retreat-but-still-are-unusually-high-distribution-troubles-mount
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