Frac Spread: Natural Gas Spike Cuts Into Margins

NGL prices static as commodity traders remain unimpressed with progress on China trade deal.

Joseph
Markman
Hart Energy
Denver cold

Snow covers a car during an October storm in Denver. (Source: Shutterstock)

The benchmark Henry Hub natural gas price rose sharply as temperatures fell sharply across the U.S. last week, with even colder weather expected through Nov. 1. NGL prices held steady so the costlier gas battered NGL margins. Mont Belvieu, Texas, ethane barely clung to 1 cent per gallon (gal) in the positive.

News of an imminent resolution to the U.S.-China trade war delighted equity markets, with the Dow Jones industrial average springing back over 27,000. Commodity markets, however, were not as impressed and West Texas Intermediate (WTI) crude oil retreated on Oct. 30 after the U.S. Energy Information Administration reported an increase of 5.7 million barrels to inventories.

Despite the recent spike, natural gas prices in the U.S. are on track to set a 25-year low in 2019 and the trend does not appear ready to end soon.

Already have an account? Log In

Subscribe now to get unmatched and complete coverage of the Energy industry’s entire landscape!

View our subscription options
  • Access to site wide content
  • Access to our proprietary databases
  • Watch exclusive videos with energy executives
  • Unlimited access to an extensive library of Playbooks, Techbooks, Yearbooks, supplements, and special reports
  • Newly Added! Access to Rextag's Energy Datalink, containing extensive GIS databases of energy assets, production records, processing capacities, physical locations, planned projects, acquisition records, and much more.
Create a free account or See Group Subscription options

Joseph Markman

Joseph Markman, senior editor for Hart Energy, covers markets and provides data analysis for all Hart Energy editorial products.

Recommended Reading