The effects of the February 8 explosion at Enterprise Products Partners’ Western Storage facility in Mont Belvieu seem to have subsided as natural gas liquid (NGL) prices trended downward this week after having a somewhat artificial uptick from the incident.

While prices were generally down at both Mont Belvieu and Conway, the outlook remains positive for the NGL market. “The fundamentals still look good for NGLs provided there is not another recession. Gas-to-crude ratios are near record low levels, petrochemical demand is strong and the US petrochemical industry’s competitive position continues to improve relative to petrochemical producers in the Middle East,” according to En*Vantage’s Weekly Energy Report.

Although Mont Belvieu propane prices closed the week of March 2 at $1.40, their second-highest price in over two years, they suffered a 4% drop from last week’s price of $1.47 as supply shortages at the LDH hub at Mont Belvieu have lessened. The Conway propane price was also down 4% from last week, as it hit $1.30 due to weaker heating demand.

Once again isobutane prices had the largest drop of any NGL despite being a key component in creating alkylate in summer-grade gasoline. While this should increase demand, refiners haven’t yet fully switched over to this blending process yet. As a result, Mont Belvieu isobutane prices fell 6% to $1.82, which was the lowest price at the hub in a month. The Conway price was down slightly to $1.89, as it appears to have found balance following its large price drop the week of February 16.

Butane prices fell 3% at both hubs the week of March 2 as demand for winter-grade gasoline has flattened. The Mont Belvieu price of $1.76 and the Conway price of $1.67 were the lowest prices at each hub since the week of February 9.

The lone heavy NGL to experience price growth this week was C5+, which benefitted from its close relationship to crude prices. Its Mont Belvieu price improved 3% to $2.50, its highest price since it was the same price the week of August 27, 2008. The Conway price remained stronger than its Mont Belvieu counterpart despite a slight drop in price to $2.53. However, this is the second highest price in the Mid-Continent since the week of July 30, 2008 when the price was $2.67.

Ethane prices were a mixed bag this week as the Mont Belvieu price experienced a 2% drop to 67¢, its lowest price in a month, while the Conway price improved by 3% to 50¢, its highest price since the first week of the year when it was 51¢. – Frank Nieto