Frac Spread: Oil Fight Hits NGL Prices Hard

Hypothetical barrel tumbles to four-year low with tightly squeezed margins.

frac spread 031220

(Source: HartEnergy.com, Shutterstock.com)

The gut punch that crude oil prices took on March 9 was felt by NGL, too, and petrochemicals can expect to suffer body blows, as well.

Last week’s hypothetical NGL barrel at Mont Belvieu, Texas, fell to a 50-month low of $15.44. It was a 13.3% week-over-week hit driven mostly by major losses from the butanes and natural gasoline.

“U.S. producers using cheap NGL feedstock have enjoyed a competitive advantage in polyethylene (PE) production vs. their peers in Europe and Asia which largely use oil-based naphtha,” wrote Joseph Chang, global editor for ICIS Chemical Business. “However, with a major decline in crude oil prices, the U.S. advantage dissipates.”

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.

Joseph Markman

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