Frac Spread: Surplus Could Lead To Pro-Pain

Exports are insufficient so far to keep propane inventories manageable, but as the price continues to drop, that could change.

Frac Spread March 21, 2019

(Source: Shutterstock, EIA website, Hart Energy)

Ethane’s price dropped to a 10-month low at Mont Belvieu, Texas, last week but pentanes-plus reached its highest point since October, the month in which it peaked and began a 41% free-fall to less than $1 per gallon (gal).

Ethane inventories on the Gulf Coast were down in December, according to U.S. Energy Information Administration (EIA) data. This was despite, as EnVantage Inc. noted in a report, no increase in ethane cracking demand. The analysts attributed the decrease in stocks to a hike in exports.

Prices will rise for ethane, EnVantage promises, in the second half of the year when a slew of new crackers come online.

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Joseph Markman

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