Margins widened for Mont Belvieu, Texas, ethane and C5+ last week but other NGL experienced lower prices and narrower margins.

This lull is expected to be temporary, En*Vantage Inc. said, anticipating exports to trend higher for ethane in the medium term and for propane’s price slide to be limited to 10 cents per gallon (gal).

Ethane, which slipped less than one-quarter of 1% at Mont Belvieu but 8.4% at Conway, Kan., in the past week, is wending its way through a demand falloff triggered both by shutdowns caused by Hurricane Harvey and planned maintenance of ethylene plants, En*Vantage said. Fundamentals still look promising for ethane, though, with October exports expected to be between 130,000 barrels per day (Mbbl/d) and 138 Mbbl/d.

Propane prices, which have been powering the steady rise in value of the hypothetical NGL barrel, dropped to their lowest level in five weeks at both hubs. En*Vantage perceives a price ceiling in the mid-90 cents/gal for propane until winter fuel demand picks up in several weeks. Anything higher removes the competitive advantage propane has enjoyed against naphtha in Asian and European markets.

At Mont Belvieu, the price of propane peaked at 97 cents/gal on Sept. 25. At Conway, the peak was 92.4 cents/gal on the same date. The price was more than 50% higher at both hubs compared to last year at this time.

En*Vantage believes the price, now around 70% of West Texas Intermediate (WTI) crude oil, could fall to about 65% of WTI, or still considerably higher than the 49% at this time last year. If that were to happen, the lower price would likely induce a spike in exports and increases in propane cracking.

For propane demand to be strong at higher price points, crude oil would have to spike. And while crude has been steady all year, analysts like En*Vantage and Brussels-based Anas Abdoun of Stratas Advisors are keeping wary eyes on the conflict in Kurdistan, which produces about 750,000 barrels of oil per day (bbl/d). Iraqi troops last week secured areas of northern Iraq from separatist Kurdish forces but earlier this week the two sides exchanged fire in two towns.

Venezuelan crude is at risk, as well. Not only are shipments down 56% since last year, but quality is an issue: reported that one shipment of crude was rejected by a U.S. refiner because it contained four times as much water as allowed. A lack of funds has forced Libya to cut back on maintenance and appears unable to boost production.

Storage of natural gas in the Lower 48 increased by 64 billion cubic feet (Bcf) in the week ended Oct. 13, the U.S. Energy Information Administration reported, above the Bloomberg consensus of 63 Bcf and below the 2016 increase of 74 Bcf. It is also below the five-year average increase of 75 Bcf and resulted in a total of 3.71 trillion cubic feet (Tcf). The figure is 4.8% below the 3.899 Tcf figure at the same time in 2016 and 1.2% below the five-year average of 3.756 Tcf.

Joseph Markman can be reached at and @JHMarkman.