Propane Surges While Crude Stalls – What Market Signals Are Telling Us
Key Takeaways:
Once a domestic heating fuel, propane is now a global export commodity, increasingly influenced by Asian demand and crude benchmarks
Propane prices remained firm this winter due to strong demand, export pull, and Gulf Coast infrastructure hiccups
With crude in the mid-to-upper $60s and propane near 40% of WTI, end users may find current levels attractive for layered price protection
Watch the full discussion below:
To sign up for the Focus on Fuels podcast, find it on your preferred podcast platform: Apple Podcasts, Spotify, or YouTube.
To sign up for the Focus on Fuels podcast, find it on your preferred podcast platform: Apple Podcasts , Spotify , or YouTube . With oil markets range-bound and product prices facing resistance, the latest Focus on Fuels podcast episode turns its attention to propane – a market that’s held up surprisingly well despite seasonal expectations.
Focus on Fuels hosts Alex Hodes and Trevor McClanahan were joined by StoneX Risk Manager Nathan Keown, who brings first-hand experience from the midstream propane world. Together, they unpack what’s been happening in propane markets, why prices are rising at a time when they typically fall, and how traders and end users should be thinking about hedging in this evolving environment.
According to Keown, the propane landscape has changed dramatically over the last decade and a half. Once a primarily domestic heating fuel with demand dictated by U.S. winters, propane has become a global export product, increasingly tied to the whims of international demand and crude oil benchmarks. With U.S. production significantly outpacing domestic use, exports—especially to Asia—have become the market-clearing mechanism.
Recent price action reflects both strong winter demand and growing export pull. Conway and Gulf Coast (Belvieu) prices ran higher in January and February, supported by weather-driven consumption and some unplanned hiccups at Gulf Coast fractionators. That tightness, Keown notes, mirrors the broader global competition for feedstocks like naphtha and propane in petrochemical manufacturing—especially in China. And despite the recent firmness, Keown sees opportunities for end users. “Crude in the mid to upper $60s puts propane in a pretty attractive place to start locking in prices,” he explains. He suggests that a level around 40% of WTI—a typical pricing benchmark—can serve as a guide, with lower-to-mid 70s cents per gallon offering solid value.
For propane marketers, the key is protecting their customer base from unexpected spikes—whether driven by winter demand, supply chain hiccups, or geopolitical tension. Hedging part of the book early, then layering in exposure opportunistically, allows flexibility while limiting downside risk.
The episode also touches on propane’s relationship to other fuels. While once assumed to follow natural gas prices, Keown emphasizes that its correlation to crude is much stronger—something new market entrants often learn the hard way. As the U.S. expands export capacity in the Gulf Coast, that linkage to global oil markets is only expected to grow.
In other words, propane may look like a simple domestic product—but it’s playing on a global stage.
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---Experts: Nathan Keown, Energy Risk Manager; Alex Hodes, Director of Energy Market Strategy and Trevor McClanahan, Energy Risk Manager
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