The price of the hypothetical NGL barrel at Mont Belvieu, Texas, sunk to a 22-month low last week, weighted down by ethane, which suffered an 8.8% weekly drop on its way to its lowest level since late January 2017.

“Fundamentals are slowly improving for Gulf Coast ethane balances, but it may take several weeks before rising demand for ethane, which is estimated to increase 180,000 barrels per day [bbl/d] by June, can offset the headwinds,” wrote EnVantage Inc. analysts in a report.

EnVantage still holds out the possibility that Mont Belvieu ethane could reach 50 cents per gallon (gal) later this year as more cracking demand comes online but the chances of sustaining prices at that level are slim. Ethylene inventories were at 3.1 billion pounds in the first quarter and are expected to remain high through the end of the year.

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