Prices Fall as Ethane Loses Preferred Petrochemical Feedstock Designation

Prices for natural gas liquids (NGLs) largely retreated this week, pushing prices below their average January price range. However, for the most part prices remained healthy compared to the same period one year ago, as well as in December.

Although ethane stock levels continue to tighten, which has helped them close the price gap with other NGLs, prices took the biggest dip between Conway and Mont Belvieu. Part of this price dip can be attributed to ethane losing its favored status as a petrochemical feedstock due to cheaper alternatives. As ethane prices decrease, the produce regains value in the petrochemical industry.

For the week, Mont Belvieu ethane was down 5% to US75¢, its lowest price at the hub in a month. Conway ethane fell 6%, which pushed the price back below 70¢ to 65¢. This is also the lowest price at the hub in a month.

Propane was also down this week – 4% at Conway to $1.29 and 5% at Mont Belvieu to $1.26. Both prices were the lowest at their hubs in a month.

After several weeks of limited activity, Conway iso-butane saw increased trading. However, this resulted in a 7% price retreat to $1.59, its lowest price since the week of Dec. 16 when the price was $1.55. By comparison, the Mont Belvieu price was up 1% to $1.66.

Butane prices were up 1% at Mont Belvieu to $1.49, but fell 1% to $1.39 at Conway. The Kansas price was the lowest at the hub since the week of Nov. 11 when the price was $1.32. En*Vantage reported that heavy NGLs were down this week, possibly due to the refining industry preparing to make summer grade gasoline in February, which requires lower vapor pressure components.

C5+ was the lone NGL to rise in price at both hubs this week, as it was up 1% at both Conway and Mont Belvieu. The Kansas price was up to $1.79, the highest it has been in three week, while the Texas price rose to $1.80.The upward movement in C5+ prices was largely attributed to improved crude oil prices. – Frank Nieto