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Propane Price Glossary

Two-sentence definitions of the propane-pricing terms that matter, deep-linked at fragment URLs. Each entry stands as a citable definition.

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Capped-price contract
A retail propane contract that sets a maximum per-gallon price for the heating season but allows the customer to pay a lower price if the market falls. Often priced 5 to 10 cents per gallon above an equivalent pre-buy contract because of the embedded option premium.
Cold-snap surge
A short-term residential propane price spike triggered by extreme cold weather drawing inventory faster than the wholesale supply chain can replenish. The 2014 polar vortex episode is the most dramatic in the EIA archive.
Crude oil correlation
The relationship between crude oil prices and propane prices, which is real but loose because most US propane is produced at natural gas processing plants rather than oil refineries. Correlation tightens during crude price shocks (2022) and loosens in normal markets.
EIA Weekly Heating Oil and Propane Survey
The canonical primary source for US residential propane and heating oil prices, published every Wednesday afternoon during the heating season (October through March) by the U.S. Energy Information Administration. The survey covers the US average and selected state-level series; off-season updates are monthly.
Front-month futures
The futures contract closest to expiration, typically the most actively traded for a given commodity. Propane front-month futures trade on CME (formerly NYMEX) settling against the Mont Belvieu cash benchmark.
HD-5 propane
The consumer-grade propane specification under HD-5 (95% propane, no more than 5% other gases), maintained by GPA Midstream Association. Almost all residential and commercial propane sold in the US meets HD-5; vehicle propane and a few industrial uses may require tighter or different specs.
Heating season
EIA's data window for the Weekly Heating Oil and Propane Survey, running October 1 through March 31. Weekly survey readings are published during this window; monthly readings cover the off-season.
Mont Belvieu
The primary natural gas liquids trading hub in North America, located in Chambers County, Texas, with major NGL storage caverns and pipeline interconnects. The Mont Belvieu spot price is the wholesale benchmark for almost every propane gallon in the US market. Detailed at /wholesale-vs-retail/#mont-belvieu.
NGL (natural gas liquids)
The collective term for the heavier hydrocarbons (ethane, propane, butane, isobutane, pentanes-plus) extracted from natural gas streams at processing plants. Propane is the second-largest NGL by US production volume after ethane.
Off-season
EIA's data window outside the October-to-March heating season, when the Weekly Heating Oil and Propane Survey publishes monthly readings on the second Monday of each month rather than weekly. April through September.
OPIS
Oil Price Information Service, now part of Dow Jones, the price-reporting agency that publishes the canonical Mont Belvieu daily benchmark used by traders, distributors, and EIA. OPIS subscriber data is the standard industry reference for retail margin context.
PADD
Petroleum Administration for Defense District, the EIA regional framework dating to World War II. PADDs 1A (New England), 1B (Central Atlantic), 1C (Lower Atlantic), 2 (Midwest), 3 (Gulf Coast), 4 (Rocky Mountain), and 5 (West Coast) are the units EIA reports propane data against. See /by-state/.
Pre-buy contract
A retail propane contract that locks the customer into a fixed per-gallon price for a specified gallon volume, paid up-front in the summer for delivery during the following heating season. Usually offered with no upside if the market drops, hence cheaper than capped-price contracts.
Residential price
The retail propane price paid by residential customers, including all delivery, distribution, and tank-rental costs that arrive on the bill. EIA reports a US average and selected state-level residential prices weekly during the heating season.
Retail spread
The difference between the wholesale spot price (Mont Belvieu) and the residential retail price for the same week. The spread covers pipeline transport, regional terminal storage, tanker delivery, local distributor margin, tank rental amortisation, the seasonality risk premium, and regulatory fees.
Spot price
The wholesale price at the trading hub for immediate delivery, as opposed to a futures or contract price. Mont Belvieu spot is the propane benchmark; OPIS publishes the canonical daily quote.
STEO
EIA's Short-Term Energy Outlook, published the second Tuesday of each month, projecting US energy supply, demand, and prices for the next 12 to 24 months. The propane forecast section covers residential price, wholesale path, and inventory levels.
Summer fill
A discounted propane refill in July, August, or September that captures the seasonal trough in the price cycle. Suppliers offer summer fill discounts because steady summer deliveries smooth operational utilisation across the year.
Tank rental
The annual fee paid by a residential customer for a leased propane tank owned by the supplier. Tank rental is a common cause of supplier lock-in: the customer cannot switch to a competing supplier without buying or replacing the leased tank. See sister site propanecostpergallon.com/propane-tank-rental.
Variable-rate / market-rate contract
A retail propane contract that prices each fill at the prevailing market rate at the time of delivery, with no cap or floor. The most common contract type and the one with the most exposure to cold-snap surges.
Wholesale price
The price of propane at the trading hub or distribution terminal, before retail distribution costs. Mont Belvieu spot is the most widely cited US wholesale benchmark; EIA also publishes a residential supplier wholesale price (the price paid by retail distributors).
Winter Fuels Outlook
EIA's annual special edition of the Short-Term Energy Outlook published in October, projecting average household winter expenditure for natural gas, electric, heating oil, and propane households. The most consumer-facing forecast EIA publishes.

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