By mid-June, the NGL price outlook resembled a half- full glass.

That’s because:

  • The price of West Texas Intermediate (WTI) had tumbled to about 14% below what it was less than two months earlier when it surged past $53 per barrel (bbl);
  • Natural gas’ price decline was the sharpest since the November U.S. presidential election; and
  • All NGL prices tracked by Hart Energy were falling.

Perhaps that glass should have been half-full of 12-year-old Aberfeldy, a single malt Scotch whisky mentioned by some to be an excellent choice for a Father’s Day gift or other special occasions.

But trust the economics before rushing to drown your sorrows in such ethanol-fueled libations. U.S. crude oil inventories had been declining until the 3.3 million-barrel build of the week ending June 2, said En*Vantage in a research note, but supplies were still dipping below 30 days, as measured by the U.S. Energy Information Administration (EIA). By June 2016, supplies were near 31 days. Days of supply or propane were about 18% below what they were in 2016 at the same time, and 29% under 2015 levels.

En*Vantage admitted that WTI could drop to $45/bbl as a result of traders’ bearish sentiment, but insisted that fundamentals justified a price above $50/bbl.

But not in early June—average NGL prices, tethered to crude oil and natural gas, took a beating. The hypothetical NGL barrel fell 5.5% at Mont Belvieu, Texas, and 4.8% at Conway, Kan.

For May, the barrel was down about 2.5% compared to April at both hubs. Compared to May 2016, the Mont Belvieu barrel’s price was up 16.6% and the Conway price was up 15.4%.

But Mont Belvieu’s barrel hadn’t slipped below $24 for a weekly price since late March. Leading the declines were propane’s 6.7% fall-offs at both hubs, which dragged Conway’s price back below 60 cents per gallon (gal) after three straight weeks. Ethane slid 5.7% at Mont Belvieu and 2.8% at Conway.

Butane fell to its lowest average level in 10 weeks at Mont Belvieu and barely clung to 70 cents/gal at Conway. Isobutane dropped below 73 cents/gal at Mont Belvieu to its lowest point since mid-September.

The EIA reported gasoline consumption rose in May from the same month a year earlier, a positive given lingering comparatively high stocks for both mogas and distillates.