Due to the Thanksgiving Day holiday, Frac Spread will not appear next week. It will return on Dec. 5.
The Mont Belvieu, Texas, hypothetical NGL barrel hit a six-month high last week, breaching $23 for the first time since mid-May.
The 2.1% weekly rise, which extended the barrel’s rally to seven weeks, was bolstered by a 4.9% jump in normal butane. That increase in normal butane, combined with a 2.6% drop in the price of Mont Belvieu isobutane, narrowed the spread between the butanes to just over 5 cents per gallon (gal), compared to 10.6 cents/gal last week and 28.5 cents/gal at the start of October.
EnVantage Inc. partly attributed the quick contraction in the isobutane to normal butane price spread to a sudden higher demand.
“Export demand for normal butane remains strong as well as season demand for n-butane as a blendstock for producing winter grade gasoline,” the analysts wrote in a recent report.
EnVantage has also suspected that maintenance work on the Enterprise Products Partners butane isomerization plant at Mont Belvieu is a cause for the price increase. The work is in anticipation of the company’s new isobutene dehydrogenation plant that is scheduled to start up before the end of 2019. That facility will be capable of producing 425,000 tons per year of isobutylene, Enterprise said when it announced the project in early 2017.
Continental Resources Inc. founder Harold Hamm touched on struggling NGL prices on Nov. 20 in his opening keynote at the DUG Midcontinent Conference and Exhibition in Oklahoma City.
“That will correct,” he told attendees. “At present, it’s under a lot of pressure.”
West Texas Intermediate (WTI) crude oil closed up 3% at just above $57 per barrel on Nov. 20 as the 1.4 million barrel build in U.S. inventories was slightly less than the 1.6 million barrels expected by analysts.
OPEC+ will meet in early December to decide whether deeper production cuts are needed. Also on the radar are talks between the U.S. and China and whether the two economic powers can make progress on reaching a trade agreement. Trade experts now see completion of a “phase one” deal as not likely until next year. China wants more extensive tariff rollbacks than the Trump administration is willing to offer, and the U.S. is seeking resolution on intellectual property and technology transfer issues.
In the week ended Nov. 15, storage of natural gas in the Lower 48 experienced a decrease of 94 billion cubic feet (Bcf), the Energy Information Administration (EIA) reported. That compared to the Stratas Advisors expectation of an 80 Bcf withdrawal and the FX Empire median expectation of an 89 Bcf withdrawal. The EIA figure resulted in a total of 3.638 trillion cubic feet (Tcf). That is 16.2% above the 3.132 Tcf figure at the same time in 2018 and 1.6% below the five-year average of 3.698 Tcf.
Recommended Reading
Subsea Tieback Round-Up, 2026 and Beyond
2024-02-13 - The second in a two-part series, this report on subsea tiebacks looks at some of the projects around the world scheduled to come online in 2026 or later.
Defeating the ‘Four Horsemen’ of Flow Assurance
2024-04-18 - Service companies combine processes and techniques to mitigate the impact of paraffin, asphaltenes, hydrates and scale on production—and keep the cash flowing.
2023-2025 Subsea Tieback Round-Up
2024-02-06 - Here's a look at subsea tieback projects across the globe. The first in a two-part series, this report highlights some of the subsea tiebacks scheduled to be online by 2025.
Oil States’ ACTIVEHub for Digitized Assets
2024-03-14 - Oil States Energy Services’ new ACTIVEHub system and ACTIVELatch help operators remotely monitor and automate frac locations for a more efficient and safer wellsite.
AI Advancing Underwater, Reducing Human Risk
2024-03-25 - Experts at CERAWeek by S&P Global detail the changes AI has made in the subsea robotics space while reducing the amount of human effort and safety hazards offshore.