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.”