Propane Prices, Explained

1. The fuel that is not made from crude oil, mostly

Propane is the heating fuel of rural America, the backup fuel on millions of grills and forklifts, a farm fuel every fall, and, less visibly, one of the largest export products the United States sells. It is also the fuel most readers of oil market news understand the least, because it does not behave like the rest of the barrel. It is not, for the most part, a refinery product at all.

Start with the chemistry the US Energy Information Administration (EIA) uses. Propane is C3H8, a straight chain paraffinic hydrocarbon extracted from natural gas or refinery gas streams. It is a gas at normal temperature and pressure and boils at minus 44 degrees Fahrenheit, which is why it is shipped and stored as a pressurized liquid and why it works in winter when other fuels gel or fail. The commercial grade sold for heating is HD-5 propane under ASTM specification D1835. It belongs to the family called natural gas liquids, or hydrocarbon gas liquids in EIA language, alongside ethane, butane, and natural gasoline.

The supply split is the single most useful fact on this page. In 2020, the most recent year EIA has broken out in detail, 76 percent of US propane was produced at natural gas processing plants and the remaining 24 percent at petroleum refineries. Gas plant output grew 5.6 percent that year even as crude oil and natural gas production fell, which is the pattern to remember: propane supply rises and falls mainly with wet gas drilling and processing, not with refinery runs. A refinery outage can tighten gasoline and diesel while barely touching propane. A slowdown in shale gas drilling does the reverse.

That one fact explains most of propane pricing. Propane is a byproduct. Gas producers drill for methane and oil, and propane comes out of the stream whether the propane market wants it or not. Supply is therefore steady, weather indifferent, and hard to throttle quickly. Demand is the opposite: spiky, seasonal, and split between buyers who want the molecule for entirely different reasons. Nearly every propane price story is a collision between bored supply and excitable demand.

2. Three demands, plus a fourth that shows up every fall

Propane demand has three standing parts and one seasonal guest, and the price at any moment depends on which of them is bidding hardest:

• Home and commercial heating. Propane is the main heating fuel in about 5 percent of US homes, concentrated in the rural Midwest and Northeast, in areas beyond the reach of natural gas pipelines. The EIA notes that more than 80 percent of households heating with propane in its survey work are rural, and in the Midwest the rural share runs above 90 percent. This demand is almost entirely a winter event and is driven by heating degree days, not by price. A household with a 500 gallon tank and a furnace does not negotiate with January.
• Petrochemical feedstock. Chemical plants crack propane into propylene and ethylene, the building blocks of plastics, and they buy year round. Unlike households, plants are price sensitive: they can switch between propane, ethane, butane, and naphtha depending on which feedstock is cheapest per unit of output. This flexible demand is the market shock absorber. When propane gets expensive relative to alternatives, chemical buyers step back and leave more for heating. When it is cheap, they soak up the surplus.
• Exports. This is the demand that changed the market. US propane exports averaged a record 1.8 million barrels per day in 2025, the most since EIA began collecting the data in 1973, after setting the previous record of 1.8 million barrels per day in 2024 and growing for 17 straight years. The National Propane Gas Association reported exports averaging above 2 million barrels per day in the second quarter of 2026, with May and June 2026 the two strongest export months on record. The top destinations are Japan, China, Mexico, and South Korea. Exports matter because they clear the surplus: without the waterborne market, byproduct supply would overwhelm domestic demand and hub prices would collapse. With it, a cold snap in Asia or a disruption to Middle East LPG supply bids against an Iowa homeowner for the same molecule.
• Crop drying, the fall guest. Farmers burn propane to dry harvested corn and other grain down to storable moisture. The window runs roughly four to six weeks, from mid October through Thanksgiving, and its size depends on how wet the harvest is. A wet fall in the Corn Belt can pull hard on Midwest inventories in the exact weeks before heating season starts. The EIA flagged this mechanism explicitly in its winter stock assessment: a later than usual corn harvest raises grain drying demand, and that demand draws on Midwest inventories in late October and early November.

Hold those four buyers in mind and the rest of this page is arithmetic. The heating buyer cannot wait, the chemical buyer can switch, the export buyer sets the floor, and the farm buyer arrives uninvited in October. Prices are set at the margin where those four meet a stockpile.

3. Two hubs: Mont Belvieu prices the world, Conway prices the winter

US propane has two wholesale benchmarks, and confusing them is the most common reading error in propane coverage:

• Mont Belvieu, Texas. The Gulf Coast hub, and the largest natural gas liquids hub in North America. It sits next to the fractionators that separate mixed NGL streams into pure products, next to most petrochemical demand, and next to the export terminals. The EIA puts about 70 percent of US propane storage capacity in the Gulf Coast region (PADD 3). Mont Belvieu therefore prices the export and chemical market: it is the number Asia watches, and the number that moves when a cargo is bid away or a terminal goes down.
• Conway, Kansas. The Midwest hub, the second largest in North America, and the distribution point for the region that burns the most heating propane. The EIA has described the Conway area as home to about 30 percent of the nation's propane storage. Pipelines such as Mid-America and ONEOK move product north from Conway into the upper Midwest. Conway prices the heating and farm market: it is the number that matters in January in Minnesota.

The relationship between the two is called the north south spread, and its normal state is a Conway discount. Moving propane from the Gulf Coast to Kansas costs money, and the Midwest is usually long on supply relative to its own demand outside winter, so Conway trades a few cents under Mont Belvieu. In the coldest months the gap narrows and sometimes flips. Market history compiled by RBN Energy shows Mont Belvieu has averaged above Conway in December through February about one third of the time over the past 15 years, so a winter Mont Belvieu premium on its own is not a crisis signal. A Conway premium is different. Conway traded above Mont Belvieu through the final four months of 2022, by between about 0.8 and 3.3 cents a gallon, during a period of relative US propane shortage. Conway at a premium means the Midwest is bidding product away from the export coast, which only happens when the region is short. In January 2014 it happened at a scale nobody in the market has forgotten, which is section 7.

September 2026 gave a clean, calm example of the normal pattern. Trade press price reporting (LP Gas Magazine, using OPIS hub data) had Mont Belvieu closing at 87.5 cents a gallon on September 10, up from 67.25 cents at the start of August, with Conway at 76.5 cents, an 11 cent Conway discount. A year earlier, on September 11, 2025, the same hubs closed at 70.5 cents and 68 cents. Both hubs rose year over year, and the discount widened. That is a market being pulled up by the Gulf Coast side, crude and exports, while the Midwest sat comfortable. Section 5 shows how to prove that reading with one division.

4. The yardstick: propane as a percentage of crude

Because propane is quoted in cents per gallon and crude in dollars per barrel, the two prices look unrelated until you convert them. One barrel is 42 gallons, so crude per gallon is the barrel price divided by 42. Propane traders then express the hub price as a percentage of that figure. The percentage strips out the crude rally or selloff and leaves the propane balance visible.

Here is the method with hypothetical teaching figures, chosen for clean arithmetic, not a description of any real trading day:

What does the percentage mean? Analysis by Aegis Hedging, reviewing the past decade of Mont Belvieu pricing, puts the pattern plainly: when US propane inventories run in surplus against the five year average, the share has typically traded between about 30 and 50 percent of WTI; when inventories run below the five year average, it has ranged between about 50 and 75 percent. Treat those bands as one firm's reading of history, not a law, but the logic underneath them is sound. Propane is priced off its own stockpile first and off crude second.

Now apply the yardstick to the real September 2026 readings from section 3. LP Gas Magazine reported Mont Belvieu at 36 percent of WTI in September 2026, down from 47 percent at the same point a year earlier, with Conway at 32 percent of WTI. Propane's dollar price had risen more than 20 cents from August, yet its share of crude had fallen sharply, and EIA inventory data showed stocks running nearly 13 million barrels above the year earlier level. Rising price, falling share, heavy stocks: that combination is a crude driven rally hitting a well supplied propane market, and the percentage told you so in one number. When you read that propane prices are up, always ask: up in cents, or up as a share of crude? The two answers can point in opposite directions, as they did this fall.

A second worked comparison shows the retail end of the chain, again with every figure labeled. The wholesale gallon at Mont Belvieu closed at 87.5 cents on September 10, 2026. The EIA Winter Fuels Outlook of October 6, 2026, reported by Reuters, expects residential propane in the South to average about $3.19 a gallon this winter, about 1 percent below last winter. The gap between roughly 88 cents and roughly $3.19, about $2.31 a gallon, is not anyone's single markup. It is pipeline or rail transport, regional and local storage, truck delivery to individual tanks, retailer operating costs and margin, and state level charges, stacked in sequence. This is why two households in different states can pay very different prices in the same week while both are honestly priced off the same hub.

5. The seasonal machine: build, dry, draw

Propane runs on a calendar crude oil does not have. The EIA describes the rhythm directly: US propane stocks usually build from April to September, when consumption is low, and decline from October to March, when heating demand rises. Production does not follow that calendar. Gas plants produce all year, exports sail all year, and chemical plants buy all year, so the stockpile is the buffer that absorbs the winter. The whole market is an exercise in filling a tank in summer and arguing about whether it is full enough by October.

The autumn shoulder is busier than the simple build and draw story suggests, in three specific ways:

• The drying window lands first. Crop drying demand hits the Midwest from mid October through Thanksgiving, drawing on exactly the PADD 2 stocks that heating season is about to need. A wet, late harvest is the classic setup for trouble, because it spends part of the winter buffer before winter starts.
• The forward curve votes on storage. OPIS forward prices reported by Dow Jones in September 2026 had Mont Belvieu futures easing from about 84.1 cents for October to about 81.1 cents for February, a backwardated shape, while Conway futures rose from about 75.8 cents in October to about 79 cents in February. Read together, the market was paying no premium to store Gulf Coast propane into winter, because Gulf stocks were heavy, while it paid a rising price for Midwest propane into winter, because that is where winter demand lands. One curve, two regions, opposite storage signals.
• Retail fills happen before the cold. Households and dealers top up tanks in fall, so retail demand peaks ahead of the temperature peak. A price move in October is often logistics and tank filling, not yet weather. The weather bill arrives in December and January, against whatever the stockpile has left.

For the inventory level itself, the reference case the EIA published heading into a recent winter is worth keeping as a template for how to read any year: stocks for the week ending September 26 stood at 103 million barrels, about 13 million barrels above the previous five year average for that time of year, with weekly inventories above the five year average consistently since late May and gas plant production up 5 percent in the first seven months of the year against the same period a year earlier. Level, distance from the five year average, trend since spring, and production growth: four numbers that describe the winter setup better than any single price quote. Apply the same four questions to the current release before repeating any claim that propane is tight or comfortable.

6. The winter 2026-27 setup: comfortable propane, tight everything else

This winter makes a useful contrast case, because propane enters it as the calm fuel in an otherwise stressed complex. The EIA Winter Fuels Outlook, released October 6, 2026 alongside the Short Term Energy Outlook and reported by Reuters the same day, expects households that heat primarily with propane to spend about 3 percent less this winter than last, an average of about $1,246 per household from November through March on the national summary of the outlook, with the Northeast average at about $1,687, down about 15 percent. In the same outlook, households heating with natural gas spend about 9 percent less, while households heating with oil spend about 21 percent more, because distillate markets are tight: East Coast distillate stocks sat about 32 percent below their five year seasonal average in September and are forecast to stay 20 to 30 percent below average through the winter.

This site's own data tells the same split story. The PetroEyes EIA export, refreshed October 12, 2026, puts US distillate stocks at about 105.1 million barrels for the week ending October 2, 2026, with New York Harbor heating oil at $4.66 a gallon that week, and the site futures book carries heating oil at $4.70 a gallon against WTI crude at $93.35 a barrel. Divide the crude price by 42 and crude works out to about $2.22 a gallon, which means the heating oil gallon is priced at more than double the crude gallon it was refined from. Set that beside Mont Belvieu propane at 87.5 cents and 36 percent of WTI in September. One winter fuel is priced like a shortage. The other is priced like a surplus being pulled up by its neighbors. Households feel that difference directly, which is why the outlook has oil heat bills rising by a fifth while propane bills ease.

None of that guarantees a quiet propane winter. It describes the starting position: heavy national stocks, a wide Conway discount, a falling share of crude, and an official outlook for slightly lower household spending. The risks that could overturn it are specific and watchable, and they are the subject of the next two sections: a wet harvest spending the Midwest buffer, sustained severe cold, an export surge if Middle East LPG supply is disrupted, or a logistics failure between the Gulf Coast and the Midwest. Comfortable in October is a statement about stocks, not a promise about February.

7. When it breaks: January 2014, the stress case

Every propane analyst carries the winter of 2013-14 as the reference disaster, and it is worth walking through in sequence because each step maps to a check in section 9. RBN Energy's reconstruction, built on OPIS prices and EIA inventory data, runs like this:

• Fall 2013: the buffer gets spent early. A late, wet, bumper corn crop needed heavy propane drying. Regional inventories were drawn down by that demand before winter began. Midwest propane stocks then fell 12.8 million barrels from the week ending October 11 into January, against a five year average decline of 7.3 million barrels over the same span, per EIA figures reported at the time.
• December 2013: the cold arrives early and stays. Sustained polar vortex cold drove record heating demand. Conway ended 2013 at about $1.45 a gallon, already elevated, and the supply chain never got a mild week in which to catch up.
• January 2014: logistics fail at the worst moment. By January 17, PADD 2 inventories were down to 10.2 million barrels, about 11.6 million below the same week a year earlier and roughly 6 million below the bottom of the five year range. The Cochin pipeline, a key supply line into the Midwest from Canada, was partly closed ahead of its reversal out of propane service, a North Dakota fractionation plant was shut for work, rail was congested, and strong Gulf Coast exports were pulling supply south. Conway's premium over Mont Belvieu reached 95 cents a gallon by January 21, with Conway spot at $3.24 while the Gulf Coast sat at less than half that level.
• Late January 2014: the spike. OPIS cash prices at Conway reached the $4.00 to $4.65 range, with an intraday print near $4.93 a gallon, close to $210 a barrel in crude terms and an all time US propane record. At least 20 state governors declared emergencies. Retailers trucked propane hundreds of miles to find supply.

Note the structure, because it is the template for every future event. No single cause was sufficient. National production did not fail; the failure was regional and logistical: the wrong stocks, in the wrong region, spent early by farm demand, then hit by extreme cold with the resupply lines impaired. That is why this page keeps returning to PADD 2 stocks and the Conway spread rather than the national total. In 2014 the national balance looked survivable while the Midwest, the region that actually burns the heating propane, ran out of cushion.

8. How to read the weekly numbers

Propane data arrives inside two EIA products, and knowing which one you are looking at prevents most errors:

• The Weekly Petroleum Status Report (Wednesday). The same release covered in our guide to the EIA weekly petroleum report carries propane production, imports, and inventories by PADD region. This is the supply and stock source. Read PADD 2 and PADD 3 separately, compare each with its five year range, and note the propylene non fuel use adjustment EIA reports inside total stocks.
• The Heating Oil and Propane Update (winter Wednesdays). From October through March, the EIA publishes residential and wholesale propane prices by state and region, released Wednesdays at 1:00 p.m. Eastern per the EIA schedule. This is the retail source: the number households actually pay, state by state. Wholesale hub moves show up here with a lag and a markup, and the state spread inside this release is the fastest way to see a regional shortage forming.

A five minute weekly routine, in order: check total stocks against the five year average; check PADD 2 stocks against the bottom of the five year range, not just the average; check the Conway to Mont Belvieu spread for a flip to a Conway premium; convert Mont Belvieu to a percentage of WTI and note whether the share or the cents did the moving; and, from October, glance at the residential price table for Midwest states moving faster than the national average. That routine would have flagged the fall of 2013 weeks before the January headlines, and it costs nothing to run. For the natural gas side of winter, pair it with our guide to the EIA natural gas storage report and the natural gas price page, since gas and propane compete at the margin for winter heating attention and both draw on the same cold weather.

9. Limits and common mistakes

Propane analysis fails in predictable ways. Six of them, stated plainly:

• Reading the national stock total and stopping. Seventy percent of storage capacity sits on the Gulf Coast, next to exports. A comfortable national number can hide a thin Midwest, and the Midwest is where heating demand and crop drying collide. 2014 is the standing proof.
• Treating the hub price as the retail price. The hub quote excludes transport, storage, delivery, and margin, which together added roughly $2.31 a gallon in the labeled comparison in section 4. Any story that applies a wholesale percentage move directly to household bills is skipping most of the bill.
• Blaming or crediting crude for every move. Propane follows crude loosely and its own balance tightly. September 2026 rose 20 cents while its share of crude fell from 47 to 36 percent. Report the share, not just the cents.
• Forgetting the export bid. At above 2 million barrels per day in the spring of 2026, exports are larger than the entire residential heating sector's winter draw in flow terms. A disruption to competing LPG supply abroad, or a cold winter in Asia, reaches Kansas through the export terminal before it reaches the weather map.
• Ignoring the chemical swing buyer. Petrochemical demand retreats when propane is dear and returns when it is cheap, which cushions both spikes and collapses. Forecasts that hold chemical demand fixed through a price spike overstate the spike.
• Confusing propane with natural gas and with LNG. Propane is a liquid fuel delivered by truck and stored in a tank at the property; it is not pipeline gas and needs no liquefaction plant or regasification terminal. Its export ships are LPG carriers, its hubs are Mont Belvieu and Conway, and its winter is a tank logistics problem. Our LNG export dynamics explainer covers the methane side of the export story, which runs on different infrastructure and different contracts.

10. A reader's checklist

When a propane headline crosses your screen this winter, run these six checks before drawing conclusions:

1. Which price? Mont Belvieu, Conway, a state residential average from the Heating Oil and Propane Update, or a single retailer quote. An unattributed propane price is usually Mont Belvieu wholesale and tells you little about household bills.
2. Cents or share? Convert the hub price to a percentage of WTI per gallon. Below roughly 40 percent with heavy stocks is a surplus market being dragged by crude; a share pushing past 50 percent is propane's own balance tightening.
3. Where are PADD 2 stocks? Compare Midwest inventories with the five year range for that week, and ask whether crop drying has already spent part of the buffer. The bottom of the range in December is the 2014 warning line.
4. What is the Conway spread doing? A normal winter narrows the Conway discount. A Conway premium means the Midwest is bidding supply away from the coast. Size matters: cents is stress, the 95 cents of January 2014 was crisis.
5. What are exports doing? A strong export pace into a cold domestic winter tightens the Gulf Coast first and the Midwest second. Watch for terminal or shipping disruptions in either direction.
6. What ends it? A mild spell, the end of the drying window, chemical buyers switching away, or cargoes deferred. Name the mechanism that would relieve the move you are watching. If none is visible on the calendar, be cautious about assuming relief.

For the refinery side of winter fuel pricing, see our deep dive on refinery crack spreads, which covers the distillate tightness propane is currently escaping, and track delivered prices on our gas prices page and benchmarks on the markets page.

11. Frequently asked questions

Why is propane priced in cents per gallon when crude oil is priced per barrel?

Propane is sold to households, farms, and retailers by the gallon, so the wholesale hubs quote it that way too. One barrel holds 42 gallons. To compare propane with crude oil, divide the crude price per barrel by 42 to get crude per gallon, then express the propane hub price as a percentage of that figure. That percentage, not the raw cents, is the number traders watch.

What is the difference between Mont Belvieu and Conway propane?

They are the two US wholesale pricing hubs. Mont Belvieu, Texas, sits on the Gulf Coast next to most US storage capacity, petrochemical demand, and the export terminals, so it prices the export and chemical market. Conway, Kansas, is the Midwest distribution hub, so it prices the heating and farm market. The gap between them is mostly transportation and regional balance: Conway usually trades at a discount, and a Conway premium is a warning sign of Midwest shortage.

Why do propane prices rise in fall and winter?

Demand is seasonal and supply is not. Stocks build from April to September, when heating demand is low, and draw down from October to March. On top of winter heating, fall adds a four to six week crop drying window in the Midwest, and exports and petrochemical plants buy all year. Prices firm into the draw season because the market is spending a fixed stockpile against weather it cannot forecast precisely.

Does the crude oil price set the propane price?

It anchors it, but it does not set it. Propane supply comes mostly from natural gas processing, so it follows gas drilling more than oil drilling, and its price relative to crude moves in a wide band. In surplus years Mont Belvieu propane has traded near 30 to 50 percent of WTI on a per gallon basis; in shortage years the share has pushed toward 50 to 75 percent. In September 2026 propane rose with crude, yet its share of WTI fell, which told you inventories, not crude, were in charge.

Why is retail propane so much more expensive than the wholesale quote?

The hub quote is for a gallon at a storage hub in Texas or Kansas. A residential gallon also pays for pipeline or rail movement, local storage, truck delivery to your tank, the retailer margin, and any state charges. That is why a wholesale price under a dollar a gallon can sit underneath a residential price above three dollars a gallon, and why retail prices vary so much by state and by how far you live from supply.

What would make propane prices spike this winter?

The January 2014 recipe: a wet harvest that burns extra propane on crop drying, followed by sustained severe cold, on top of thin Midwest inventories or a logistics failure. Watch PADD 2 (Midwest) stocks against the five year range, the Conway to Mont Belvieu spread flipping to a Conway premium, and export pace out of the Gulf Coast. Comfortable national stocks with a weak Midwest position is the pattern that has hurt before.

12. Related reading

• How to Read the EIA Weekly Petroleum Status Report - the Wednesday release that carries propane production and PADD level inventories alongside crude, gasoline, and distillate.
• How to Read the EIA Weekly Natural Gas Storage Report - the other winter stockpile, and the build and draw rhythm propane supply is tied to through gas processing.
• Refinery Crack Spreads, Explained - the refining margin arithmetic behind this winter's tight distillate and heating oil prices.
• Gasoline Price Breakdown, Explained - how a wholesale fuel price becomes a retail price, slice by slice, for the fuel most readers buy weekly.
• LNG Export Dynamics - the methane export system, and how it differs from the LPG trade propane moves in.
• Natural Gas (Henry Hub) Price Today - the benchmark for the gas stream most US propane is processed out of.

Data and sources: U.S. Energy Information Administration - Glossary definition of propane (C3H8, boiling point minus 44 degrees Fahrenheit, HD-5 specification); Today in Energy, March 8, 2021, on 2020 supply (76 percent of US propane from natural gas processing plants, 24 percent from refineries, gas plant output up 5.6 percent) and record 2020 exports; EIA export data as reported March 31, 2026 (US propane exports averaged a record 1.8 million barrels per day in 2025); EIA seasonal inventory pattern and winter stock assessment (build April to September, draw October to March; week ending September 26 stocks of 103 million barrels, about 13 million above the five year average; Gulf Coast about 70 percent of storage capacity; grain drying draw in late October and early November), as reported by Reuters; EIA Winter Fuels Outlook, October 6, 2026 (propane heated households to spend about 3 percent less, about $1,246 on average November to March, Northeast about $1,687 down about 15 percent, South residential propane about $3.19 a gallon, heating oil households about 21 percent more, East Coast distillate stocks about 32 percent below the five year average in September), as reported by Reuters and in outlook summaries; EIA Heating Oil and Propane Update release schedule (weekly, October to March, Wednesdays 1:00 p.m. Eastern); LP Gas Magazine market reporting, September 2026, from OPIS hub prices (Mont Belvieu 67.25 cents at the start of August to 87.5 cents on September 10, Conway 76.5 cents; September 11, 2025 closes of 70.5 and 68 cents; Mont Belvieu at 36 percent of WTI against 47 percent a year earlier, Conway at 32 percent; inventories nearly 13 million barrels above the year earlier level); OPIS forward prices as reported by Dow Jones, September 18, 2026 (Mont Belvieu about 84.1 cents for October and 81.1 cents for February, Conway about 75.8 cents for October and 79 cents for February); National Propane Gas Association, July 2026 (exports averaging above 2 million barrels per day in the second quarter of 2026, May and June 2026 the strongest months on record, top destinations Japan, China, Mexico, and South Korea); RBN Energy reconstructions of the winter 2013-14 crisis from OPIS prices and EIA data (Conway premium of 95 cents on January 21, 2014, Conway spot $3.24, intraday prices near $4.93, PADD 2 stocks of 10.2 million barrels on January 17, Midwest draw of 12.8 million barrels against a 7.3 million five year average, Conway area storage about 30 percent of the national total per EIA); Aegis Hedging analysis of the Mont Belvieu share of WTI (about 30 to 50 percent in surplus years, 50 to 75 percent in deficit years). PetroEyes EIA export refreshed October 12, 2026 (distillate stocks about 105.1 million barrels and New York Harbor heating oil $4.66 a gallon for the week ending October 2, 2026; futures book heating oil $4.70 a gallon and WTI $93.35 a barrel). Worked examples labeled hypothetical use invented teaching figures; all other figures are as published by the sources named, for the periods stated.