Market Snapshot: Low propane inventories and plentiful natural gas stocks ahead of winter

Release date: 2025-12-03

Canadian propane inventories sit below average levels heading into winter. In contrast, natural gas storage is abundant, reaching record highs. Forecasts for this winter do not provide a clear indication of weather impact on heating fuel (propane and natural gas) demand in the coming months.

Preliminary 1 November 2025, Canadian underground propane^{Footnote 1} inventories were 1,561 thousand cubic meters (10³m³) (9.82 million barrels [MMb]), which is 1.6% below the five-year minimum of 1,587 10³m³ (9.98 MMb) and 19.7% below the five-year average. Regionally, underground propane storage in western Canada was at 1,027 10³m³ (6.46 MMb), 2.4% higher than the five-year minimum but 12.6% below the five-year average. Ontario stocks were 534 10³m³ (3.36 MMb), 7.4% over the five-year minimum, but also 30.6% below the five-year average.

Figure 1: Underground propane inventories in Canada

Source: CER - Monthly Underground LPG Inventories

Text Alternative: The line charts display daily propane storage levels in thousand cubic meters and million barrels from 1 January 2020, to 1 November 2025, for western Canada, Ontario, and Canada as a whole. Propane inventories typically decrease from January through April, reaching their lowest levels in spring, then rise steadily through summer, peaking in early autumn before tapering off toward year-end. The dark blue line representing 2025 remains below the five-year average and near the lower end of the historical range across most months, indicating lower-than-usual propane stocks so far this year. Volumes are either imperial (MMb) or metric (10³m³) units.

Canada's natural gas storage reached a new record of 31,118 million cubic meters (10⁶m³) (1,099 billion cubic feet [Bcf]) on 1 November 2025, 2.0% higher than the five-year maximum. Regionally, western Canada gas stocks were 21,507 10⁶m³ (760 Bcf) by November, 3.9% above the five-year maximum. In contrast, eastern Canada's storage was 9,611 10⁶m³ (339 Bcf), 0.6% below the five-year average.

Figure 2: Natural gas inventories in Canada

Source: CER Natural Gas Inventories

Text Alternative: The line charts display daily natural gas storage levels in million cubic meters and billion cubic feet from 1 January 2020, to 1 November 2025, for western Canada, eastern Canada, and Canada as a whole. The charts show gas inventories in 2024, 2025, five-year average, and five-year range. In western Canada, storage levels in 2025 have been above the five-year range since July. In eastern Canada, inventories in 2025 remained within the five-year range, below 2024 levels until September, and then moved in line with 2024 levels. Volumes are either imperial (Bcf) or metric (10⁶m³) units.

Recent market context and winter weather outlook

Production of Canadian natural gas and propane, which is a byproduct of liquids-rich natural gas processing, has increased in recent years, driven by expanding output from British Columbia's liquids-rich Montney Formation.^{Footnote 2} In western Canada, in addition to high gas production, slower-than-expected LNG Canada exports, mild winter and summer weather, and pipeline bottlenecks^{Footnote 3} have contributed to high gas storage levels, leading to low, and at times even negative, natural gas prices. Some producers curtailed production in late 2024, early 2025, and again in September and October 2025 in response to the oversupply^{Footnote 4}. In contrast, higher marine exports of propane from British Columbia's ports and overland exports to the U.S. and Mexico have helped balance Canadian propane markets in 2025, allowing propane stocks to gradually increase during the year.

Recent winter outlooks from Environment and Climate Change Canada^{Footnote 5} forecast an above normal probability of warmer winter temperatures across Canada for November, December, and January. In contrast, the U.S. National Oceanic Atmospheric Administration^{Footnote 6} suggests a cooler-than-normal winter outlook as La Niña conditions are present and favoured to persist to February 2026. During La Niña years, the jet stream over North America is often shifted further north, which causes changes in temperatures, storm tracks and precipitation, particularly in winter months.^{Footnote 7} The presence of La Niña^{Footnote 8} patterns may increase propane and natural gas demand for heating this year.