Several Factors Causing Big Drop In Propane Prices
Date posted - December 16, 2015
Northwest Iowa — Northwest Iowa farmers are struggling with low commodity prices, but they’re catching a big break right now on propane. The Energy Information Administration (EIA) reported last week that propane prices in the Midwest have dropped to their lowest level in a decade.
E-I-A economist Sean Hill says prices across the region are down around 15 percent from a year ago. Possibly the biggest factor is the weather.
In Iowa, propane prices are averaging around $1 per gallon. Last year at this time, prices were hovering around $1.60 per gallon. Hill says another reason for the decline is crude oil prices are at significantly lower levels compared to the last five years.
Then, there’s the overall supply and demand picture, according to Hill.
Propane inventories in the Midwest are 11-percent higher than last year, according to the EIA. About 15-percent of Iowa’s households are heated with LP.