US Gulf Coast propane was assessed 9% lower at $1.55/gal Tuesday on a warmer weather forecast for much of the US, sources said.
"This is what happens when you get strong run-up in prices," said analyst Peter Fasullo of EnVantage.
Gulf Coast propane had climbed 10.90% since the start of February on cold weather and a demand pull from the Midcontinent.
Weather forecasts from the Commodity Weather Group show that it is going to be warmer than normal across much the US in the next 7-14 days, especially in the Midcontinent.
The backwardation between February and March propane narrowed to 30 cents from 40 cents Monday as prompt propane became more abundant.
The Energy Information Administration will release its weekly propane and propylene storage report Wednesday. A Gulf Coast source said the market was expecting a draw in the 1 million-barrel range.
