The streak had to end at some point. During the week of April 2, ethane margins turned negative at both Conway and Mont Belvieu. Margins had been running at positive, albeit very slim, levels for the previous month.
Ethane rejection remains the norm throughout the country, but there are signs of hope for traders as margins have continued to remain theoretically positive throughout the end of the winter and early spring.
Although temperatures didn’t approach the lows experienced during the polar vortex events earlier this year, natural gas prices were at their strongest in early March. This caused frac spread margins to take downturns across the board.
Natural gas liquids frac spread margins improved across the board the week of March 10 at both Mont Belvieu and Conway as heating demand subsided, causing gas prices to crash. NGL prices largely held firm at both hubs.
Despite cold temperatures and heavy snow in parts of the country, NGL prices largely fell at both Mont Belvieu and Conway the first week of March as the propane supply shortage from earlier this year has since caught up with demand.
Although price differentials between Canadian crude and that of other markets hasn’t curtailed investment, it may be moving midstream companies toward pipelines that head out to tidewater locations instead of inland, experts say.