Natural gas liquids (NGL) prices for the week of November 17 took a downturn in accordance to a drop in crude oil prices, but managed to increase their value in relation to crude prices since they didn’t fall as far. For the week, NGL theoretical barrel prices gained nearly 1% on West Texas Intermediate (WTI) crude prices.
The final week of November 2010 saw natural gas liquids prices improve across the board at both hubs from the prior week as they followed the upward trend experienced by crude oil prices during the week.
Frac spread margins for natural gas liquids largely told two different tales between Conway and Mont Belvieu in the month of October with margins at Conway mostly down and Mont Belvieu margins up across the board.
Increased natural gas feedstock prices as well as reduced natural gas liquids (NGL) prices resulted in a mixed bag for frac spread margins with lighter NGLs experiencing reductions in their margins while some heavy NGLs saw slight upticks in their margins.
Natural gas liquids prices once again settled down in the middle of a month after experiencing an uptick in prices at the end of the previous month and start of the current month as volatility has been dropping after the initial rush to shore up supplies.
Once again ethane frac spread margins showed the greatest improvements this week at both Mont Belvieu and Conway as prices at both hubs hit their highs since March. However, aside from ethane most other natural gas liquids experienced smaller margin improvements this week on the back of smaller price gains.
Ethane prices experienced a strong surge this week at both Mont Belvieu and Conway as the market for ethane continues to improve. Increased ethane prices coupled with its greater volatility was the highlight of another strong week for natural gas liquids (NGL) prices.
Despite slight increases in natural gas feedstock prices, frac spread margins improved this week on the back of consistent improvements in heavy natural gas liquids (NGL) prices and very strong performances on the lighter end this week.
Once again natural gas liquids (NGL) prices experienced a bump from the end-of-month/beginning-of-the-month period when traders are seeking to shore up supplies. Overall NGL prices rose for the fourth straight month due to a combination of slight improvements in the market as well as the general economy.
The biggest and most important movement for natural gas liquid frac spread margins in the third quarter was the very strong improvements shown by ethane at both Conway and Mont Belvieu, where margins improved at a staggering pace.
Aside from ethane margins and Mont Belvieu propane, the frac spread for natural gas liquids was down across this board this week despite sizable decreases in natural gas feedstock prices at both Conway and Mont Belvieu.
Natural gas liquids prices fell in all but one case this week at Mont Belvieu and Conway as the market continues to experience improvements at the end of and beginning of the month before falling during the middle of the month. The driving force behind the price improvements is traders seeking to shore up any shortages they have by entering the spot market.
As natural gas liquids prices fell in value this week, frac spread margins also took a hit for the most part at both Conway and Mont Belvieu. The lone margins to improve this week were Conway iso-butane and Mont Belvieu C5+, which were also the lone NGLs to experience price increases this week.