Natural gas liquids trading is quite unlike natural gas or crude oil. Natural gas is natural gas. It is a truly fungible commodity. Crude oil varies widely in quality, but it is still crude oil. Not so, NGLs. Each of the five NGLs has different physical characteristics, different end-use markets and most importantly, different factors that make prices rise and fall. It is not at all unusual for ethane prices to increase while normal butane prices fall. Or vice versa. What makes this happen? What’s carbon got to do with it? Today we’ll look at purity product trading and market pricing relationships, starting with butanes and natural gasoline.
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