As July draws to a close, ethane prices remain in free fall with major headwinds working against them, primarily in the form of plant outages that have severely reduced domestic cracking capacity.
Ethane prices had been expected to begin their long-awaited improvement this summer, but that progress appears to be getting stunted once again.
Ethane prices had the largest decrease the first full week of July as it remains closely related to gas prices, which tumbled this week. Ethane was also hurt by the continued outage of several crackers undergoing expansions or maintenance.
Wells Fargo Securities reports that the MLP sector outpaced the S&P 500 for the fourth straight month.
NGL prices were largely stagnant, with a slight trend down at the end of June as they followed losses for natural gas price and crude. Overall, NGL prices largely remained flat compared to the levels posted in the second quarter.
The U.S. shale revolution has fundamentally altered domestic hydrocarbon flows, necessitating a “replumbing” of America as new sources of supply are connected to long-haul transportation and key end markets.
There were notable price increases for butane and isobutane, which are benefitting from increased crude prices. In addition, propane prices rose at both Mont Belvieu and Conway as the uncertainty in Iraq and its hydrocarbon production is also causing a mild run-up in its value.
Speakers at Deloitte Energy Conference in D.C., highlighted the need to think and act differently as the U.S. increases its stance as a global energy power.
NGL prices rose across the board at both hubs, aside from Conway isobutane, which continued to plummet. The full reasoning behind the high premium and the sharp drop in value of Midcontinent isobutane prices has yet to be determined.
The country’s shale revolution is fueling the men and women in uniform of the U.S. military, said a former Secretary of Defense and CIA director at Hart Energy’s DUG East conference.
NOVA Chemicals Corp. announced in a June 13 statement that the first barrels of ethane from natural gas associated with Bakken Shale oil production were utilized at its Joffre, Alberta, complex.
The Conway isobutane price spike came to an abrupt end the first week of June with a 14% loss in value that saw its premium over Mont Belvieu prices get slashed in half. Capacity in the region is returning, which is providing an outlet for the product.