US Spot Propane sharply Higher Midday on Inventory Drop
HOUSTON (DTN) -- U.S. spot NGLs prices were higher at the Texas supply hubs
and mixed at the Conway hub near midday Wednesday with propane up sharply
across the hubs following the midmorning release of Energy Information data
showing a larger-than-expected decline in propane/propylene inventories during
the week-ended April 20.
At 10:30 AM ET, the Energy Information Administration reported U.S.
propane/propylene inventories dropped about 200,000 bbl in week to 35.7 million
bbl, with inventories of propane down about 400,000 bbl while propylene
supplies increased 200,000 bbl. A DTN survey showed expectations for a 100,000
bbl draw on propane/propylene supplies during the week.
Versus the same time in 2017, domestic stocks are down 3.9 million bbl or
9.9%, according to EIA data.
Near midday, NYMEX June crude oil futures were up 8cts at $67.78 bbl despite
pressure from a strengthening U.S. dollar, which was at a near 3-1/2 month high
against a basket of major currencies in early trade Wednesday.
The May RBOB futures contract was down 1.59cts near midday at $2.0790 gallon.
U.S. crude oil supplies, excluding those in the Strategic Petroleum Reserve,
increased 2.2 million bbl in the week-ended April 20 to 429.7 million bbl,
which was down 18.7% year-over-year. The American Petroleum Institute Tuesday
reported a 1.1 million bbl build in domestic crude oil supplies.
EIA data showed total domestic motor gasoline inventories increased 840,000
bbl in the week to 236.8 million bbl while API reported a 2.724 million bbl
stock draw for the week.
U.S. propane/propylene exports were at 1.071 million bpd in the week-ended
April 20, up 184,000 bpd from 887,000 bpd in the week prior. Four-week average
exports were at 782,000 bpd, down from 951,000 bpd in the same period last
year, according to the EIA.
Gulf Coast PADD 3 propane/propylene inventories dropped about 600,000 bbl
during the week to 22.5 million bbl, which was down 1.1 million bbl or 4.7%
from the same time in 2017.
Midwest PADD 2 propane/propylene inventories were at 8.9 million bbl, down
100,000 bbl from the week prior and 3.0 million bbl or 25.2% below the year-ago
"Both the inventory numbers and export number were bullish for propane,"
said an LPG trader.
Spot propane traded actively at the Texas supply hubs early Wednesday with
deal-volume at the Enterprise, LST and Targa hubs at 170,000 bbl, 115,000 bbl
and 70,000 bbl, respectively. At the Conway hub, 30,000 bbl had transacted near
At Mont Belvieu, LST spot propane and Enterprise were both up 1.75cts in
midday trade, with the former at 87.25cts gallon and the latter at 86.5cts
gallon as each hit eight-week highs.
Enterprise spot propane was valued near midday at 53.6% of nearby WTI crude
futures, up from 51.7% at the same time last week.
Targa spot propane traded 2.75cts higher at 86.0cts gallon.
Conway spot propane was done at 74.75cts gallon, up 2.125cts and at a more
than 11-week high, while its discount to Enterprise spot propane narrowed by
0.375cts to 11.75cts.
EIA data showed propane/propylene supplies in East Coast PADD 1 rose about
300,000 bbl during the week-ended April 20 to 2.8 million bbl, which was up
200,000 bbl versus the same time last year. In PADDs IV and V, which include
the Rocky Mountain and West Coast regions, propane/propylene inventories
increased 200,000 bbl in the week to 1.5 million bbl.
Agency data showed domestic implied demand for propane/propylene in the
week-ended April 20 at 884,000 bpd, which compared with 1.054 million bpd in
the week prior and 947,000 bpd in the same week last year.
U.S. propane/propylene imports were at 126,000 bpd, up from 125,000 bpd in
the week prior. Four-week average imports were at 146,000 bpd versus 114,000
bpd in the same period last year.
EIA reported refiner and blender net production of propane/propylene for the
week-ended April 20 at 1.806 million bpd, down from 1.822 million bpd in the
week prior but up from 1.799 million bpd in the same week last year.
In other U.S. NGLs spot markets, at the Enterprise supply hub normal butane
was up 2.5cts in midday trade at 98.75cts gallon and Conway normal butane
advanced 2.125cts at 80.125cts gallon, with each at fresh near eight-week highs.
Non-LST isobutane jumped 3.875cts at 100.5cts gallon, a more than eight-week
high, while Conway isobutane slid 0.5cts at 107.0cts gallon.
Mt. Belvieu non-LST natural gasoline traded near midday at 154.75cts gallon,
up 1.75cts as its premium to LST natural gasoline widened by 0.375cts to
0.75cts. Conway natural gasoline was seen 1.5cts higher at 153.5cts gallon.
Mt. Belvieu e/p mix was assessed 0.25cts higher at 26.5cts gallon while
Conway e/p mix was valued 0.25cts lower at 13.375cts gallon.
Gulf Coast purity ethane traded near midday at 27.875cts gallon, up 0.25cts.
In related markets, NYMEX May natural gas futures were down 0.9cts in midday
trade at $2.772 MMBtu.
Alton Wallace, 1.832.646.9229, Alton.Wallace@dtn.com, www.dtn.com. (c) 2018
DTN. All rights reserved.