Arctic blast fuels US propane squeeze The US is suffering a massive squeeze on propane supplies amid freezing temperatures and soaring exports of the fuel to users as diverse as furnaces and petrochemical plants. Prices have more than doubled in a week at a central trading hub in Kansas. Terminals are rationing supplies and governors from Missouri to New Jersey have invoked emergency powers to speed distribution. The shortage underscores how some US supplies remain vulnerable even as fossil fuel output surges with the shale drilling boom. Production of propane at oil refineries and natural gas processing plants has grown by a third in three years. An exceptionally cold winter, record corn harvest and rising propane exports to Latin America and Europe have precipitated the squeeze. "Those three things have converged to create the perfect storm for the propane market in 2014," said Rusty Braziel, president of the RBN Energy consultancy. A second wave of arctic air to hit the US this month has driven up demand for the fuel, which is widely used in rural areas beyond the reach of natural gas utilities. Propane stocks had fallen by 3.4m barrels last week to 35.3m barrels, the least for the time of year since 2001, the US Energy Information Administration said on Thursday. Stocks were already depleted heading into winter after farmers burnt huge volumes in heaters to dry an unusually wet, 354m-tonne corn crop. "Some of this corn, we've had to dry it, put it in bins, then take it out and have it dried again," said Karl Setzer of MaxYield Co-operative, an Iowa grain company. This means elevated demand for propane. Exports of propane have reached an all-time high, more than doubling year on year to 408,000 barrels per day in October, EIA data show. Companies such as Enterprise Products Partners and Targa Resources Partners have facilitated exports by expanding docks along the Gulf of Mexico. Enterprise announced this month that it would increase export capacity on the Houston Ship Channel. At the Conway inland trading hub in Kansas, propane jumped almost $1 to $4.37 per gallon on Thursday, according to Reuters, nearly tripling from a week ago. Prices at Mont Belvieu, Texas, the benchmark hub on the Gulf coast, rose 8 cents to $1.61. The large difference reflected difficulty transporting propane from the Gulf into the landlocked Midwest, said Andy Lipow, an oil consultant. The pipelines are full. It's a logistics and distribution issue. If we could get it to the Midwest, it would go. Shane Fortner, manager of a propane retailer in Kentucky state, said: "We're getting in a situation where our suppliers are trying to back out of contracts we made back in the spring and summer to fulfil this winter's gas." The squeeze would subside when "it warms up," said Mr Braziel. In the meantime, the propane market is going to be scrambling to keep up with demand.