Heavy natural gas liquid (NGL) prices showed the greatest movements—both positive and negative—of any NGL as the final month of 2013 began. Pentanes-plus (C5+) finally caught up with West Texas Intermediate crude oil prices as November came to a close. For the previous month, crude prices traded at just under $100 per barrel (bbl.), but heavy NGL prices hadn’t matched those movements.

While C5+ prices rose to its highest levels in more than a month at the major NGL hubs to $2.07 per gallon at Conway, Kansas, and $2.13 per gallon at Mont Belvieu, Texas, butane and isobutane took downturns at both hubs primarily due to more competition with condensate prices.

Butane fell 3% to $1.39 per gallon at Mont Belvieu and dropped 4% to $1.37 per gallon at Conway. Isobutane prices decreased at a similar rate as its sister products at both hubs with the Mont Belvieu price also dropping 3% to $1.42 per gallon and the Conway price falling 5% to $1.37 per gallon.

Despite the downturn, both sets of prices were among the highest for the products for 2013 as demand remained strong due to increased liquefied petroleum gas exports and consistent winter-grade gasoline production.

Although heavy NGLs were a mixed bag, light NGL prices held firm. This was a positive for propane as its price levels were at their highest in the past two years, but a negative for ethane as prices struggled to get anywhere near truly profitable frac spread margins.

Ethane prices benefited from improved gas prices at both hubs, but still remained very low. The Mont Belvieu price rose 1% to 26 cents per gallon, which is the range it has traded at for much of the second half of 2013. The Conway price was flat at 18 cents per gallon with low volatility as most of the industry is avoiding the hub due to increased transportation options.

The short-term outlook for ethane looks pretty bleak as the improvement in gas prices has kept margins thin. Ethane is a no-win situation as prices increase when gas prices also rise, but they have failed to pick up at a rate high enough to turn margins positive. On the other hand, they have also followed gas prices when they have fallen and thus failed to take advantage of potential gains in margin.

This should start to turnaround in March as inventories should begin to fall, which could help prices make notable improvements. En*Vantage forecasts that Mont Belvieu ethane prices could approach 30 cents per gallon by March, which would provide a positive return under current market conditions.