NGL Prices Hitting Three-Year Highs

The surge in crude oil prices is causing a similar surge in natural gas liquid (NGL) prices as they experienced significant gains across the board at both Conway and Mont Belvieu the week of April 20.

The biggest gain in price at both hubs was for ethane, which improved 9% to 82¢ at Mont Belvieu and 6% to 56¢ at Conway. The Mont Belvieu price was the largest at the hub since it was 95¢ the week of September 3, 2008 while the Conway price was the highest in a month.

Ethane prices continue to benefit not only from improved liquids prices overall, but from the strengthening of the U.S. petrochemical industry that is benefiting from a pricing advantage compared to the rest of the world. As we have reported in previous NGL Prices and Frac Spread reports, the U.S. petrochemical industry will continue to experience a price advantage due to high supply levels and increasing cracking capacity.

Propane prices also experienced solid increases the week of April 20 as they rose 4% at both hubs as supply levels remain low compared to the five-year average due to increased retail demand. The Mont Belvieu price of $1.48 was the highest at the hub since it was $1.49 the week of September 24, 2008. The Conway price of $1.38 was the highest at the hub since it was $1.43, also the week of September 24, 2008.

Butane prices also rose 4% at both hubs, nearly directly correlated to their relationship with crude prices as demand is largely down according to sources that Midstream Monitor spoke with. The Mont Belvieu price of $1.94 was the highest price at the hub since it was $1.99 the week of August 6, 2008. The $1.78 price at Conway was the highest since it was $1.82 the week of August 27, 2008.

Both hubs experienced a 2% price gain for isobutane the week of April 20 with the Mont Belvieu price up to $2.05 and the Conway price increasing to $2.00. The price at Mont Belvieu was the largest since it was $2.05 the week of July 30, 2008. The Conway price was the highest it had been in three weeks.

Pentanes-plus (C₅₊) continued to have the highest price at both hubs this week as it was up 4% to $2.52 at Conway and up 3% to $2.60 at Mont Belvieu. The Conway price was the highest it has been since it was $2.52 the week of March 2. The Mont Belvieu price was the highest it has been since it was $2.65 the week of July 30, 2008.