The weather forecast of colder conditions in certain regions will result in more holiday spending.

Really. Cold weather and “mood” snow (it’s a thing) get folks in the holiday spirit and bolster buying, says AccuWeather, which has a more optimistic forecast for the season’s sales than the National Retail Federation and also expects below-normal temperatures in the Midwest and Northeast.

So if you find yourself inspired by the chill to visit the mall, toddle into Nordstrom and see if the retailer has a special on ethane.

Ethane tumbled to its lowest point in nine months at Mont Belvieu, Texas, and 16 months at Conway, Kan., last week as NGL prices in general took a breather from their rally.

Ethane’s volatility of late has bedeviled analysts. En*Vantage suggests that a petrochemical company might be dumping ethane after experiencing an outage. Or, the setting of a next-month contract price. Or, possible delays for crackers expected to be online by the end of the year.

Then again, it might just be a question of oversupply.

Baird Equity Research hosted a recent call with BTU Analytics in which BTU’s analyst Erika Coombs discussed BTU Analytics’ new well-level NGL production model.

Based on this approach, there is material ethane available for recovery far above current market consensus, which will place a cap on ethane prices. Other models using EIA PADD level data and leveraging maximum recovery factors based on historical trends significantly underestimate the amount of recoverable ethane across the U.S.

BTU Analytics estimates 857,000 bbl/d of ethane rejection, nearly 300,000 bbl/d higher than market consensus. This indicates abundant ethane supply for crackers and export infrastructure over the next decade.

Coombs said she also believes that production from the Permian Basin will be sufficient to meet Gulf Coast demand, meaning that Northeast crackers and the Marcus Hook export terminal will not have to compete for Marcellus natural gas.

With the exception of a slight uptick for Conway butane, all tracked NGL took a hit last week, although the hypothetical barrels remained above $30 at both hubs.

Propane slipped by 1.49 cents per gallon (gal) at Mont Belvieu but was still 63.3% higher than its price last year at this time. Butane, the only NGL to rise in price last week, was up about 0.5 cents/gal at Conway.

Isobutane experienced little movement in the past week and its prices at both hubs was close to where they were a year ago. The hypothetical barrel stayed above $30 for the 11th straight week at Mont Belvieu and the fourth straight week at Conway.

Storage of natural gas in the Lower 48 increased by 2 Bcf in the week ended Dec. 1, the EIA reported, compared to the Bloomberg consensus of a 4 Bcf draw and the 2016 draw of 43 Bcf. The figure also contrasts with the five-year average decrease of 69 Bcf, resulting in a total of 3.695 trillion cubic feet (Tcf). That is 6.7% below the 3.959 Tcf figure at the same time in 2016 and 1% below the five-year average of 3.731 Tcf.

Joseph Markman can be reached at jmarkman@hartenergy.com and @JHMarkman.

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