While NGL prices entered May by mostly surrendering April’s increases, there are expectations that West Texas Intermediate will emerge from the $40s and settle in the $50 to $54 range this month.

While a market price separation is somewhere in our future, for now crude oil sets the trend, natural gas follows and NGL finds a place in the middle.

In its report, En*Vantage observed a new vulnerability in the natural gas market to events that did not trigger such extreme impacts in the past. Analysts are accustomed to short-term volatility attributable to weather. Now, markets reel from a pipeline outage in Mexico combined with a drop in volume at Cheniere Energy Inc.’s (NYSE MKT: LNG) Sabine Pass, La., LNG terminal.

But let’s return to a natural impact, the weather.

“As the LNG terminals become concentrated along the Gulf Coast we could see an outside influence of hurricanes (affecting the demand side of the equation) that the market had diversified away from over the last decade as offshore gas production (supply side) declined and inland supplies took its place,” said En*Vantage.

Then there is an unnatural impact, the prospect of a domestic natural gas shortage on the east coast of Australia, a country moving quickly toward the No. 1 slot in the global LNG export market. A resolution that diverts gas from LNG export facilities to domestic consumption could put future projects at risk and En*Vantage notes no progress on the part of federal and state governments to address restrictions on drilling.

“The importance is that any disruption in the force down under could reduce the potential competitive pressure in the global marketplace for U.S.-based exports—something to keep our eyes on,” the analysts warn.

Only ethane prices rose among NGL in the last week and the increases were slim: about 1% at Mont Belvieu, Texas, and less than 1% at Conway, Kan. En*Vantage continues to forecast inventories declining to 32 days in July, which should maintain a 30 cents per gallon (gal) price this summer. That would drop if petrochemical companies elect to substitute propane, but that would be unlikely owing to tightness in the propane market.

Propane inventories for now continue to decline, indicating that exports exceed the supply surplus. The tightness will ease, En*Vantage said, if prices rise with a reduction in cracking and a cut in exports to below 800,000 barrels per day (Mbbl/d). That won’t happen until Mont Belvieu’s price rises above first the European price and then the Asian price, possibly this summer.

Mont Belvieu’s propane price fell 4.8% this week to 61.6 cents/gal and Conway’s dropped 5% to 57.1 cents/gal. The price at Mont Belvieu is 24.9% higher than it was at this time in 2016 and the Conway price is up 20.6%.

Storage of natural gas in the Lower 48 increased by 67 billion cubic feet (Bcf) in the week ended April 28, the U.S. Energy Information Administration reported. The increase, above the Bloomberg consensus of 62 Bcf and the 61 Bcf forecast by S&P Global Platts, resulted in a total of 2.256 Tcf. The figure is 13.7% below the 2.615 Tcf figure at the same time in 2016 and 15.5% above the five-year average of 1.953 Tcf.

Joseph Markman can be reached at jmarkman@hartenergy.com and @JHMarkman.