About 5% of all U.S. households use propane as their fuel for primary space heating. We forecast expenditures for the average household that uses propane as its primary space heating fuel will be $1,805 in the Midwest, $2,012 in the Northeast, and $1,643 in the South this winter. These forecasts are $736 (69%) more in the Midwest, $645 (47%) more in the Northeast, and $494 (43%) more in the South for heating this winter compared with last winter, driven mostly by higher propane prices.
Heading into the winter heating season, propane inventory levels are low, and prices are high. As of October 13, the wholesale propane spot price at the Mont Belvieu hub near Houston was $1.42/gal, up 90 cents/gal (172%) from the same time in 2020 and at the highest level since February 2014 (Figure 2). High propane prices have been driven by strong global demand for propane, relatively flat U.S. propane production, and lower global propane production. These factors have contributed to U.S. propane inventory seasonal builds to be slower than the previous five-year (2016–2020) average (propane inventories typically build from the April-May timeframe to the September-October timeframe). U.S. propane inventories (including propylene at refineries) were 71.7 million barrels on October 8, 21% lower than the previous five-year average and 28% lower than at the same time last year.