The U.S. monthly propane-to-crude ratio fell to 44% in August, having fallen steadily since the peak in April of 56%. Despite the steady decline, current levels still exceed those seen during the same period last year, up 2 percentage points compared to a year ago. Lower ratios to crude are common this time of year due to weak summer propane demand. Strong storage builds are also bringing propane prices lower relative to crude.
Featured Articles
- Analyst Insight
U.S. Monthly Propane to Crude Ratio - Chart Toppers
Propane’s slipping—but not falling behind.
After peaking at 56% in April, the propane-to-crude ratio dropped to 45% in July. Still higher than last year.
- Blog
Are we Headed Over the Frac Spread Cliff?
The values of the crude-to-gas ratio and the Frac spread have fallen fifty percent from their highs this year. Frac spreads represent the difference between the value of natural gas and natural gas liquids (NGLs), which are heavily influenced by the price of crude. Thus the Frac spread is in effect tied to the gas-to crude ratio. Current forward curves suggest that the crude-to-gas ratio will fall another 50 percent over the next few years. Today we ask whether the Frac spread will continue it’s fall next year and beyond.
- Blog
Extreme Ways - What It Took to Balance the Natural Gas Market This Fall
You wouldn’t know it from the $2.50-plus/MMBtu Henry Hub prompt natural gas futures prices in the past couple of months, but the U.S. gas market this injection season just barely managed to avoid a complete meltdown. Despite gas production volumes trailing year-ago levels all summer long, it wasn’t until the last month or two of the traditional injection season (April through October) that the market tightened enough to escape a major storage crunch. In reality, it took the multi-pronged effects of production cutbacks — in part from hurricane-related disruptions — higher LNG and pipeline exports, and cooler fall weather, to make that happen. Today, we review the U.S. natural gas supply/demand balance and implications for 2021.
