NGL prices took a large downturn as they followed the downward trajectory of West Texas Intermediate (WTI) crude prices, which fell to their lowest levels in several years just above $80 per barrel (/bbl).
While the rest of the NGL barrel (bbl) has experienced price depreciations related to the shoulder season and decreased values for West Texas Intermediate (WTI) crude oil, propane prices improved the first week of October based on seasonal and LPG export demand.
NGL prices took a downturn as September came to a close.
Despite limited demand and large supply levels, NGL prices have been holding firm.
Ethane frac spread margins will continue to struggle in the short-term, but the increased likelihood of static gas prices should help them turn a corner.
NGL prices improved the week of Sept. 3 as several ethane crackers returned to service after undergoing unexpected turnarounds.
Despite price increases this week, ethane prices are expected to struggle until winter at the earliest.
Mont Belvieu ethane prices improved alongside natural gas prices as a result of an increase in late summer cooling demand. However, gains were small and frac spread margins continue to be challenged as they remained firmly negative for the final week of August.
A sluggish summer for commodity prices is fast drawing to a close and producers can only hope that a repeat of last winter will spur demand and increase prices for propane and natural gas.
As the summer of 2014 draws to a close, NGL prices continued to return to levels from last summer with the only real discrepancies being higher Conway propane prices and lower Mont Belvieu isobutane prices this year.
As we enter August, the winter of 2014 is a distant memory along with the gas shortages and high prices that it brought with it. The first week of August 2014 looks an awful lot like the same time last year with one key difference: even worse NGL prices and improved gas prices. It’s the worst of both worlds for NGL producers as frac spread margins are now worse off than a year ago.
The NGL market is experiencing a down period this summer as infrastructure outages, construction delays and cool weather have combined to make this a lost season.