Infrastructure: US propane and propylene inventories rose 7% W-o-W for the week ending July 17, marking the largest weekly increase since June 2025.
Exports: NGL exports increased 17.5% W-o-W for the week ending July 24, with both ethane and LPG exports showing growth.
Rigs: The total US rig count decreased by 3 rigs to 581 for the week of July 18. Liquids-driven basins decreased from 451 to 449 rigs.
Calendar: Hub Model and Basin S&D Update
Infrastructure:
US propane and propylene inventories increased 7% W-o-W for the week ending July 17, the largest weekly percentage gain since June 20, 2025. The build was concentrated in the Gulf Coast (PADD 3), where inventories reached a record 64.7 MMbbl.
The immediate catalyst was a sharp but likely temporary decline in exports. Weekly Energy Information Administration data showed propane exports fell 21%, from 1,998 Mb/d to 1,573 Mb/d. Vortexa vessel-tracking data indicates that loadings declined across several major Gulf Coast terminals, including Enterprise’s (EPD) Enterprise Hydrocarbons Terminal, Energy Transfer’s (ET) Nederland and Phillips 66’s (PSX) Freeport terminal. Targa Resource’s (TRGP) Galena Park terminal was the notable exception, posting an increase in exports.
More recent vessel activity suggests exports have since rebounded, indicating that the weekly decline was temporary rather than the start of a sustained deterioration in international demand. However, the impact on inventories was outsized, and the resulting storage overhang could weigh on Mont Belvieu propane prices through the remainder of 2026.
PADD 3 accounts for ~65% of total US propane inventories and is the primary balancing point for the increasingly export-dependent US market. Typically, Gulf Coast inventories follow a seasonal cycle of winter withdrawals followed by spring and summer injections. This year has been different. Since mid-February, PADD 3 inventories have remained broadly flat to slightly higher, bucking the normal seasonal decline during this period.
East Daley Analytics previously flagged the risk posed by high storage to the 2026 propane balance. Reaching record inventory levels this early in the year is unprecedented and leaves the market with limited flexibility to absorb additional export disruptions or continued production growth. Even if exports normalize in the near term, the market must now move materially more propane during the second half of the year simply to restore storage to a more typical seasonal trajectory.
The next major release valve is expected in December 2026, when Enterprise brings online ~300 Mb/d of additional LPG export capacity at its Enterprise Hydrocarbons Terminal. Until then, elevated Gulf Coast inventories are likely to keep downward pressure on propane prices and widen the discount required to incentivize incremental international demand.
Bottom line: The export decline may be temporary, but the inventory problem will continue. Record PADD 3 stocks have created a structural overhang that will be difficult to normalize before additional export capacity enters service later this year.
Exports:
NGL exports increased 17.5% W-o-W for the week ending July 24, with both ethane and LPG exports showing growth.
LPG exports grew 16.9%, led by Enterprise’s Neches River Terminal (+182.2%). Marcus Hook exports declined 65.1% W-o-W.
On the ethane side, total exports increased 19.5% W-o-W, driven by a 106.2% surge in ET Nederland & Orbit exports and a 26.4% increase at EPD Morgan’s Point. These gains more than offset the absence of exports from Neches River following a one-week spike and a 60.2% decline at ET Marcus Hook.
Rigs:
The total US rig count decreased by 3 rigs to 581 for the week of July 18. Liquids-driven basins decreased from 451 to 449 rigs.
- Anadarko (+1): Raney Oil
- Eagle Ford (-1): Verdun Oil
- Midland (-1): Langford & Brigham Operating
- Powder River (-1): WRC Energy
