The hypothetical NGL barrel jumped to its highest level in more than five months at both the Mont Belvieu, Texas, and Conway, Kan., hubs in the past week as margins expanded in double figures for all components but one.
Ethane at Mont Belvieu pushed toward 26 cents per gallon (gal) as it reached its highest level since the first week of the year. At Conway, the average price over the last week surpassed 22 cents/gal for the first time since early February.
The analysts attribute oil’s recent strength to export cuts by Saudi Arabia and the assumption that Libya and Nigeria are nearing or have hit their production ceilings. Venezuela remains difficult to gauge following the recent vote to rewrite the country’s constitution and the threat of sanctions by the U.S. government.
While the average weekly price of ethane is up 39.1% at Mont Belvieu over the price of a year ago, and 57.1% higher at Conway, its rise at both hubs since the start of the second quarter has been more modest—9.8% at Mont Belvieu and 16.7% at Conway. Prices are constrained at the high end by record-high inventories and supported at the low end by strong cracking and export demand, En*Vantage explained.
The butanes continued their rallies at both hubs, with Mont Belvieu’s butane price cracking 80 cents/gal for the first time since April and hitting its highest point since late February. Conway butane also surpassed 80 cents/gal for the first time since late February and the 12-month increases were 55.9% at Mont Belvieu and 57.9% at Conway.