Easy come, easy go. That is what has happended to the large price spread between Mont Belvieu normal butane and isobutane over the last week. As shown on the chart below, the spread peaked between the two products on November 27th at almost 40 c/gal but has since plunged to 1.8 c/gal on December 8th. It looks like stronger normal butane prices is the main culpruit but the rationale for the huge move is not clear.
Featured Articles
- Analyst Insight
Mont Belvieu Isobutane – Normal Butane Price Differential Soars
The Mont Belvieu iso-normal spread reached a year-to-date high of 34 cents/gal on November 3, the widest differential since hitting 47 cents/gal on August 23, 2022. The main culprit has been strong isobutane prices which have rallied from 90 cents/gal on October 12th to about 114 cents/gal currently, while normal butane prices have barely budged.
- Analyst Insight
Wild Volatility in the Isobutane – Normal Butane Differential: 60.5 c/gal to Negative -4.4 c/gal
On May 8, 2024, the spread between Mont Belvieu isobutane and normal butane soared to 60.5 cents per gallon, a level surpassed only once before, one day back in 2018.
- Blog
Basket Case - The Strange Relationship Between Mont Belvieu and Conway NGLs
Mont Belvieu, TX and Conway, KS, are the two most significant U.S. hubs for NGL trading, storage and fractionation, with the much bigger Mont Belvieu hub primarily serving Gulf Coast and export demand, while the smaller Conway hub is focused on Midwest/Great Plains demand, especially for propane. The pricing dynamics between the two hubs are a key indicator of the supply/demand balance between the regions, but they don’t have the same kind of influence over the direction or magnitude of flows as price differential dynamics often do for other energy commodities. In today’s RBN blog, we will examine the gap between the price of the NGL “basket” in Mont Belvieu versus Conway and what that price spread tells us.
