The Conway price of ethane in E/P mix has tumbled in recent weeks, hitting a 4-year low of 9.9 c/gal on May 6. Since then, the price has increased to 10.7 c/gal but remains very low by historical standards. Not only are prices in Conway low, the spread between Conway and Mont Belvieu prices is very high. Current Belvieu prices are roughly 19.8 c/gal, creating a spread between the two NGL hubs of 9.1 c/gal. Stated another way, the Conway price is 54% of the Belvieu price.
Featured Articles
- Blog
Bring It On - Record Crude and Gas Production Leads to Record NGL Production at Just the Right Time, Part 2
With U.S. NGL production hitting a record high of just over 4.0 MMb/d in the fourth quarter of 2017 and ethane production also reaching record volumes at 1.6 MMb/d, the price for ethane has remained stuck at about 25 c/gal — where it’s been for the past two years, even though prices for other NGLs are up over the same period. The combination of roaring high-ethane-content Permian and SCOOP/STACK NGL volumes, coupled with steam cracker outages and construction delays due to Hurricane Harvey, have landed us here. So where do we expect the ethane market to go now as incremental cracker and export demand ramp up in 2018 and 2019? Today, we continue a series on our updated NGL market forecast, highlighting the NGL product whose market is going through the most changes: ethane.
- Blog
Carbon Rich Value High – NGL Trading and Pricing Part III: Ethane
On Friday purity ethane in Mont Belvieu came in at 36.4 cnts/gal on OPIS, up 1.5 cnts while Conway ethane in E/P mix was up 1.25 cnts to 15.75 cnts/gal. Given that at this time last month Conway was trading at a dismal 2.25 ctns/gal while Mont Belvieu was wallowing under 30 cnts/gal, these numbers sound pretty good (See Chart #1 below). But let’s not lose sight of the fact that these prices are still dirt cheap. This time last year ethane prices were 2.5X to 3X higher. Is this simply a replay of the natural gas-oversupply-price-collapse story as some are saying? Or is it more complicated than that? As you’ve probably guessed, it is definitely more complicated than that. Because this the simplest of the NGL molecules turns out to be surprisingly complex in the marketplace. Today we’ll break down that complexity by looking at the details of the ethane markets.
- Blog
Good Margin Gone Bad - Today's Horrific Petchem Margins and the Implications for NGLs
Could it get any worse? Possibly, but the last time we saw petchem margins this bad was in the depths of the 2008-09 economic meltdown, and back then the atrocious margin levels resulted in drastic plant curtailments and in some cases permanent shutdowns. But this time around the petchem industry is in the process of bringing on even more capacity! Is the current situation a fluke, or a harbinger of things to come? In today’s blog we examine recent trends in steam cracker margins, by far the largest demand sector for natural gas liquids (NGLs) and consider what these developments may mean for NGL markets in general, and ethane in particular.
