Ethane’s average five-day price at Mont Belvieu, Texas, inched its way toward 38 cents per gallon (gal) last week, reaching another 42-month high. The daily price on Aug. 20 did, in fact, hit 40 cents/gal.

Two new fractionators at Mont Belvieu are adding 90,000 barrels per day (Mbbl/d) of ethane, but the added supply won’t rain on either the price nor margin parades, Envantage Inc. believes. Mont Belvieu’s ethane margin surged to 18.33 cents/gal last week, a 4.7% increase over the previous week. The price is 39.3% above where it was at the same time in 2017.

Envantage sees higher Gulf Coast ethane demand driven by new cracker capacity and strong exports as supporting the higher prices. In fact, demand is so high that more supplies need to flow in from other regions, including the Permian Basin, Midcontinent, Niobrara and Bakken. The industry’s bugaboo—infrastructure constraints—will be an issue until projects are completed near the end of 2020.