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.

Joseph
Markman
Hart Energy
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.

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