Ethane came out the winner this week in terms of frac spread margin improvement, as it was the lone natural gas liquid to experience an uptick in margin at both hubs this week due to experiencing the smallest price drop at Conway and Mont Belvieu combined with natural gas feedstock prices falling 11% at Kansas and 5% at Texas.
Last week natural gas liquid prices at both Conway and Mont Belvieu were up, but fell as the work wore on. That downward spiral continued this week and caused NGL prices to have their first overall decrease at both hubs in six weeks.
Fairly sharp decreases in natural gas feedstock prices at Conway (6%) and Mont Belvieu (8%) resulted in frac spread margins for natural gas liquids (NGL) improving at both hubs. These improvements were further aided by NGL prices increases at both locations.
Prices for natural gas liquids (NGL), especially heavy NGLs, were up this week at both Conway and Mont Belvieu as they continued to perform strongly due to their closer relationship with crude oil. However, as the week wore on there was a noticeable decline in price as crude prices began to fall due to data being released that showed Chinese demand for crude fell in July.
Frac spread margins for natural gas liquids (NGL) were down in the month of July with the exceptions of propane, which improved its relationship to crude oil throughout the month at both Conway and Mont Belvieu, and Conway butane.
Natural gas liquid frac spread margins were a mixed bag this past week at both Mont Belvieu and Conway with most NGLs having smaller gains or losses. The exception was Conway ethane, which once again returned to a technically positive margin.
Natural gas liquid (NGL) prices continued to improve this week as cooling demand witnessed increases on hotter than normal temperatures. In addition, prices were supported by end of month volatility, especially in the cases of Mont Belvieu propane, butane and iso-butane.
There were significant drops in natural gas liquid frac spread margins from the start to the end of the second quarter, most notably in the case of ethane, which became negative to produce at Conway during the quarter though the margin was theoretically positive as the quarter closed.
Modest increases in both natural gas liquid (NGL) and natural gas feedstock prices helped to largely increase NGL frac spread margins this week at both Mont Belvieu and Conway with the exceptions of Conway ethane and C5+ and Mont Belvieu iso-butane, all of which saw their margins fall this week.
Natural gas liquid prices continued to improve slightly at both Mont Belvieu and Conway this week as it appears that they hit their low for the summer several weeks back and have at the least stabilized for the time being.
The frac spread margin for natural gas liquids (NGL) deteriorated throughout the month of June as the normal summer decrease in NGL and natural gas prices occurred. However, natural gas feedstock prices fell at a slower rate than NGL prices, which hastened the fall of NGL margins further down.
Improved natural gas feedstock prices drove the Conway ethane frac spread margin back into negative territory a week after it had regained theoretical positive value. Overall, Mont Belvieu margins outperformed their Conway counterparts with only C5+ margins improving at both Conway and Mont Belvieu this week.