Mont Belvieu Ethane Lone NGL Price To Improve

Mont Belvieu ethane prices were the only NGL prices to improve at either hub the week of Sept. 21 as they increased 3% to reach their highest price since the first week of August. Overall, NGL prices were negatively affected by the continued weakness in crude prices.

This week’s Mont Belvieu ethane price of 80¢ per gallon (/gal) was the first time that the hub’s price had been above the 80¢/gal threshold in eight weeks and was the fifth-highest price at Mont Belvieu in three years. This price improvement is primarily based on strong market fundamentals for ethylene.

Crackers are currently operating at 90% capacity with an average daily cracking rate of 940,000 to 950,000 barrels per day (b/d). However, beginning next week operating capacity should drop to 87% with Shell taking its Deer Park cracker offline for maintenance. By mid-October, capacity should increase to about 94% when the Formosa Pt. Comfort #2 plant and ExxonMobil’s Baton Rouge cracker return from being down.

While Mont Belvieu ethane continues to gain strength, Conway ethane prices dropped for the first time in three weeks. Its 9% drop was the largest of any NGL this week and the 42¢/gal price was the lowest at the hub since it was 38¢/gal the first week of September.

Despite having increased export demand and lower storage totals, propane prices dropped at both hubs this week with the Mont Belvieu price down 5% to $1.52/gl and the Conway price down slightly to $1.42/gal. However, prices at both hubs remained significantly higher than last year at the same time.

Heavy NGL prices were most affected by the decrease in crude prices as only Mont Belvieu isobutane remained largely unchanged from last week at $2.20/gal. Its Conway counterpart fell 6% to $2.04/gal, but retained its status as having the highest price at the hub for the third straight week.

This was because Conway C₅₊ dropped 8% in value to $1.89/gal, which was the lowest price at the hub since it was $1.86/gal the week of Nov. 17, 2010. The price of Mont Belvieu C₅₊ dropped 5% to $2.30/gal, its lowest price in six weeks.

Butane prices also fell at both hubs the week of Sept. 21 as the Mont Belvieu price dropped 5% to $1.88/gal and the Conway price was down 8% to $1.65/gal. The Mont Belvieu price was the lowest at the hub since the week of Aug. 17, when it was $1.85/gal while the Conway price was the lowest at the hub since the week of Aug. 24, when it was $1.61/gal.