There is typically a 10-20 c/gal difference between the price of Mont Belvieu normal butane and propane, but most years at the end of the winter season that difference gets tight. This year the March differential has dropped to the lowest level since January 1, 2023, hitting 4.9 c/gal on Friday, March 21 (left graph below; lowest except for one day in June of 2023). So, what is the reason for the narrow spread? Well of course, it is high propane at 89 c/gal and low normal butane at 93.5 c/gal according to OPIS.
Due to a cold winter in northern parts of the U.S., propane demand has been strong in 2025, drawing down inventories to 43.3 million barrels, the lowest level for this week of the year in the past three years (blue arrow, right graph). The demand to rebuild inventories is keeping propane prices high on a relative basis, about 42% of crude oil. But butane is a different story. As winter draws to a close, the end of motor gasoline winter butane blending season is near, wrapping up in late April to early May, depending on state-specific RVP regulations. Normal butane prices have dropped nearly 30 c/gal (down by 25%) since January and will likely continue to fall. Could the normal butane price fall below propane? It’s unlikely but it does happen, most recently in April 2021.
