US Spot NGLs End mostly Higher while Oil Futures Advance
HOUSTON (DTN) -- U.S. spot NGLs prices finished higher at the Texas supply
hubs and mostly up at the Conway hub Wednesday, with support from advancing New
York Mercantile Exchange oil futures.
At settlement, NYMEX June crude oil futures were up 18cts at $71.49 bbl and
the nearby RBOB futures contract was up 4.51cts at $2.2499 gallon, a 43-month
high on the spot continuation chart.
The Energy Information Administration midmorning reported U.S.
propane/propylene inventories rose an about-as-expected about 1.7 million bbl
in the week-ended May 11 at 40.4 million bbl, with stock builds in East Coast
PADD 1 and Midwest PADD 3 accounting for more than 80% of the increase.
Versus the same time in 2017, domestic propane/propylene were down 1.9
million bbl or 4.4%, EIA data shows.
Midwest PADD 2 propane/propylene stocks moved about 800,000 bbl higher
during the week-ended May 11 at 10.9 million bbl while East Coast PADD 1
supplies were up 600,000 bbl at 3.6 million bbl.
EIA reported U.S. propane/propylene exports for the week at 766,000 bpd, up
from 707,000 bpd in the week prior. Four-week average exports were at 852,000
bpd compared with 955,000 bpd in the same period last year.
EnVantage Inc. natural gas liquids analyst Peter Fasullo said his firm's
shipping survey showed U.S. propane exports at almost 1.2 million bpd in the
week, a number more than 400,000 bpd larger than EIA's figure.
"We saw week-over-week increases in liftings at every export terminals on
the Gulf Coast," Fasullo said. "After tracking closely with EIA's export
numbers through most of last year, this year we're showing exports of 121,000
bpd more than EIA. Recent price action for propane suggests exports aren't
depressed," he said.
EIA data showed U.S. crude oil supplies, excluding those in the Strategic
Petroleum Reserve, fell 1.4 million bbl in the week-ended May 11 to 432.4
million bbl. The American Petroleum Institute on Tuesday reported domestic
crude oil supplies increased by 4.85 million bbl during the week.
Total domestic motor gasoline inventories dropped about 3.8 million bbl in
the week to 232.0 million bbl while API reported a 3.369 million bbl stock draw
for the week.
Spot propane traded moderately at the major supply hubs Wednesday with
deal-volume at the Enterprise, LST, and Targa hubs at 215,000 bbl, 60,000 bbl
and 30,000 bbl, respectively, while at the Conway hub 70,000 bbl was
"When crude went positive early afternoon some buyers stepped up for propane
so there was a little more activity than we saw this morning," said a broker.
At Mont Belvieu, LST spot propane traded late session at 96.0cts gallon, up
2.5cts and at a 2-1/2 week high, and Enterprise spot propane finished with a
2.625cts gain at 96.125cts, a more than 11-week high.
Enterprise spot propane was valued late day at 56.5% of nearby WTI crude
futures, up from 51.8% at the same time last week and 56.3% two weeks prior.
Targa spot propane traded late morning at 95.0cts gallon, up 2.5cts.
Conway spot propane advanced 3.125cts Wednesday at 78.75cts gallon, a 2-1/2
week high, with its discount to Enterprise spot propane ending the day at
17.375cts, a near two-week low.
EIA data showed implied demand for propane/propylene in the week-ended May
11 at 1.002 million bpd compared with 977,000 bpd in the week prior and 548,000
bpd in the same week last year.
Refiner and blender net production of propane/propylene for the week was at
1.850 million bpd, down from 1.875 million bpd in the week prior but up from
1.803 million bpd in the same week last year.
In other U.S. NGLs spot markets, Enterprise normal butane traded late
session at 107.25cts gallon, up 1.375cts, while Conway normal butane advanced
1.5cts at 86.0cts gallon, with the former at a more than 11-week high and the
latter at a more than 14-week high.
Non-LST isobutane finished at a near 4-1/2 year high, up 3.0cts on the day
at 143.0cts gallon, and Conway isobutane rose 1.5cts at 108.0cts gallon, a more
than three-week high.
Mt. Belvieu non-LST natural gasoline traded at 162.75cts gallon, up 1.5cts
though its premium to LST natural gasoline narrowed by 0.25cts to 0.25cts.
Conway natural gasoline edged down 0.25cts at 146.0cts gallon.
Mt. Belvieu e/p mix was assessed 0.375cts higher at 23.75cts gallon while
Conway e/p mix was seen at 6.5cts gallon, down 0.5cts.
EnVantage's Fasullo said the recent decline in ethane prices, which finished
at a near 10-week low on Tuesday, are not due to a shortage of petrochemicals
demand. "A lot of ethylene capacity has come online in the last few months but
derivatives plants haven't kept up," Fasullo said. "The integrated plants are
getting good margins from their polyethylene and polypropylene operations but
those with surplus ethylene are taking a hit. Some people believe it will take
up to 18 months for the ethylene market to balance -- which would happen when
the derivative plants are up and running and Enterprise and Energy Transfer's
ethylene export terminals become operational," Fasullo said.
Gulf Coast purity ethane traded 0.125cts higher at 24.375cts gallon.
In related markets, NYMEX June natural gas futures were settled down 2.1cts
at $2.815 MMBtu.
Alton Wallace, 1.832.646.9229, Alton.Wallace@dtn.com, www.dtn.com. (c) 2018
DTN. All rights reserved.