Wholesale propane prices are up a whopping 75% since last year. What’s going on?

It is hard to believe but US wholesale propane prices are up a staggering 75% year over year as of the writing of this posting.

What on Earth is going on?

Are there any macro-economic events that could possibly explain why the fundamentals of propane demand that prices nearly double year over year?

Shortage? Nope.

Massive economic recovery? Not really.

Huge cold snap? Definitely not.

So in our experience this looks a lot like a fake rally. By fake, we mean not based on supply and demand- but based on purely financial actors that have little or nothing to do with propane. To create a picture, imagine a bunch of young men wearing Patagonia fleece vests and British wide-collared shirts, tapping away at Bloomberg screens in New York, Houston and London. When these types think they can make money making bets on propane- it isn’t good.

What we’ve also noticed is that the propane consumer is TOTALLY UNAWARE. They have no idea of what’s going on.

Tankfarm’s price is determined by Mt. Belvieu pricing. And while our prices are much higher than last year somehow we’re still driving dozens of applications to our program. But we’ve also noticed a growing number of people telling us our prices are ‘crazy.’ When we dig a little deeper seems like they got their last delivery 7 or 8 months ago.

A big reality check is coming. To add to the issues, a lot of consumers have also been lulled into a sense of security by the recent bizzaro African Bush-esque hot weather here in the Northeast. That just changed this morning here in Upstate NY, with our first frost of the season appearing on the grass and the trees.

Propane retailers- your phones are about to light up. Get ready.

Propane consumers- your bills are going to be a LOT bigger this season. Get ready.

It’s a brave new propane world we’re living in.