How long the coronavirus will maintain its stranglehold on the global economy in general and the oil and gas industry specifically is unclear. At the moment, though, its grip is tight, as evidenced by 12-month-low prices for crude oil and natural gas, and the 24-week low of last week’s Mont Belvieu, Texas, hypothetical NGL barrel.
Struggling the most has been propane. It’s been four years since the Mont Belvieu price has been so anemic. Propane on Feb. 11 was 31.2% of the price of West Texas Intermediate (WTI) crude oil—which had fallen below $50 per barrel (bbl)—and nearly 40% off its 12-month-ago level. The margin narrowed again last week to 20.7 cents per gallon (gal), compared to 38 cent/gal at this time last year.
The Conway, Kan., price of propane fell for the sixth time in eight weeks to its lowest point since late August. Its 18.4 cents/gal margin is well below the 30.6 cents/gal spread from last year.