Propane is a by-product of natural gas processing and oil refining. U.S. demand is approximately one-third that of heating oil. Propane is used in diverse markets: residential cooking, crop-drying in agriculture, space heating in homes and industry, and as a feedstock for the production of vital petrochemicals. Natural gas utilities often store propane for use during periods of peak demand.The NYMEX Division propane contract trades in units of 42,000 gallons (1,000 barrels). It provides an effective pricing and risk management tool for the gas liquids sector of the energy industry. The contract is a natural complement to the NYMEX Division crude oil, heating oil, gasoline, and natural gas futures contracts.

In September of 2009, the New York Mercantile Exchange delisted the propane futures contract. Since propane gas is a by product of natural gas and crude oil, following crude oil futures and natural gas futures can give you the general trend of propane prices.

Comments are closed.