(Source: Shutterstock, HartEnergy.com)
The price of Mont Belvieu, Texas, ethane shot up 18.9% last week to its highest point in 10 weeks as all NGL at the hub gained in price and margin except for C5+.
The NGL price bump joined with gas prices that dropped to 2019 single-day lows during the week at Chicago City Gate and Henry Hub. Those resulting wider margins included Mont Belvieu ethane’s turnaround from 1.26 cents per gallon (gal) in the negative last week to 1.62 cents/gal positive.
That said, the comparison with the same week in 2018 was stark. Mont Belvieu’s margin a year ago was 18.12 cents/gal. The ethane price is 58% less than its price of 12 months ago and the hypothetical NGL barrel at that hub is less than half of its value for the same week in 2018.
A larger-than-expected decline in U.S. crude oil inventories pushed the price of West Texas Intermediate (WTI) up by 1.6% to close at $55.78 a barrel on Aug. 28. That brought some relief to traders who have been focused on worldly matters such as Brexit, an ever-weakening global economy, the U.S.-China trade war, demonstrations in Hong Kong, and troubles with Iran and Venezuela, among other crises. The happy news even provided a 1.4% boost for energy stocks on the S&P 500 index.
Whether it sticks depends on numerous factors, not least of which is the ongoing saga of the U.S.-China trade war. An escalating situation could deliver a harsh blow to the global economy, force equity and capital markets into a tailspin, and pound oil and gas prices.
In the week ended Aug. 23, storage of natural gas in the Lower 48 experienced an increase of 60 billion cubic feet (Bcf), the Energy Information Administration (EIA) reported. Meanwhile, Stratas Advisors expected a 59 Bcf build and the Bloomberg consensus was 55 Bcf. The EIA figure resulted in a total of 2.857 trillion cubic feet (Tcf). That is 14.6% above the 2.494 Tcf figure at the same time in 2018 and 3.4% below the five-year average of 2.957 Tcf.
Technical issues with Hart Energy’s data provider do not allow us to provide the price of ethane from Conway, Kan., for the last week of March because of a loss of pricing data for that time period. For the same reason, we cannot compare the price of the hypothetical Conway NGL barrel to the previous week. Conway ethane prices are not available for March 2019 and first-quarter 2019. We apologize for the inconvenience.
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