Isobutane Prices Continue To Improve

Heavy NGL prices benefitted from an increase in crude prices the week of Nov. 2 with isobutane in particular experiencing a significant price surge as propylene alkylation demand is also on the rise.

Both the increase in crude prices and the greater alkylation demand resulted in Mont Belvieu isobutane prices rising 7% to $2.21 per gallon (/gal). This was the highest price at the hub since the week of July 16, 2008, when it was $2.34/gal. The Conway price improved 3% to $1.92/gal, its highest price since it was $2.03/gal the week of Sept. 28.

Butane prices increased at a slower pace this week as this market has been hindered by operational issues at a butane isomerization plant owned by Enterprise Products Partners. Consequently, prices only increased very slightly to $1.55/gal at Conway and $1.81/gal at Mont Belvieu.

Pentanes-plus (C₅₊) prices improved at a slightly stronger rate than butane as the Mont Belvieu price rose 1% to $2.29/gal, its highest price in three weeks. The Conway price was up very slightly to $1.93/gal.

Ethane prices were a bit of a mixed bag this week as the Conway price improved 2% to 36¢/gal and the Mont Belvieu price dropped 2% to 90¢/gal. Although there was a price improvement at Conway, it was the second lowest price at the hub in nearly three months. The Mont Belvieu price was the lowest in a month.

Despite the stagnant nature of ethane prices of late, ethane remains the most attractive feedstock to crack. However, part of the reason for the flat prices for the past few weeks may be because petrochemical companies could be selling ethane in an effort to lock in lower prices for the month, according to En*Vantage. Prices may begin to rise once this sell-off is completed.

The NGL with the worst price performance this week was propane, which was down 1% at both hubs. The $1.45/gal price at Mont Belvieu was the hub’s lowest price since it was $1.45/gal the week of Oct. 5 while the Conway price of $1.32/gal was the lowest since the week of April 13, when it was $1.31/gal.

Propane prices have been negatively impacted by low heating demand because of the fact that cold temperatures have yet to take hold across the country. In addition, export levels are dropping because of limited demand from Europe because that market is experiencing negative margins.