There has been a great deal of volatility in NGL prices throughout the past 12 months, but in many cases the trail for prices has been a circular one. The market has experienced price spikes and crashes, but compared to this time last year, most NGL prices are at the same level.

While there is something to be said for the shoulder season providing a regular decrease in prices as demand dips, this doesn’t explain why prices the week of April 17, 2013, were markedly different than prices the week of April 18, 2012.

Instead what the market movements indicate is that NGL prices may spike during high short-term weather-related demand periods, but they will fall back to previous levels when this peak demand retreats.

The NGL that had the greatest rise and fall in price this year has been propane, which rose to nearly $4.00 per gallon (/gal) at Conway and more than $1.60/gal at Mont Belvieu in late January before falling to its current level of $1.12/gal at both hubs.

This is just slightly below the $1.20/gal average that propane was trading at in late November, just before winter heating demand began to kick in throughout much of the country. Propane has benefitted from increased demand centers as LPG export capacity has increased in the past year, which has provided it a significant uplift from prices last year at the same time.

The same can’t be said, at least not yet, for ethane. While Enterprise Products Partners announced plans on April 22 to build an ethane export terminal along the Gulf Coast and Sunoco Logistics is operating its Mariner East terminal along the East Coast, there isn’t enough export capacity at this time to make much of a dent in the ethane storage overhang.

As a result, there hasn’t been significant price movement for ethane year-on-year. The Mont Belvieu price was 30 cents/gal at Mont Belveiu the week of April 16, 2014, compared to 28 cents/gal last year at the same time. The Conway price was 26 cents/gal the week of April 16, 2014, compared to 19 cents/gal the previous year at the same time. Similar to propane, ethane experienced sizable price growth in the winter as prices rose to 40 cents/gal at Mont Belvieu and 35 cents/gal at Conway in February. These increases were tied to ethane’s close relationship with propane and the cracker turnarounds. These prices helped to push margins to a sustained positive state for the first time in more than a year, but they have been unable to sustain this growth.

Butane prices have remained at similar levels at both hubs year-on-year as has Mont Belvieu isobutane, but Conway isobutane prices have increased considerably at the same time due to refinery turnarounds and shortages at the hub. It is therefore likely that this increase is an anomaly. Butane and isobutane prices traded at similar values between the two hubs for much of the past 12 months.

Mont Belvieu butane and isobutane prices were nearly identical on a year-on-year basis with butane trading at $1.27/gal for the week of April 16, 2014, and the same time last year while isobutane was nearly identical at $1.32/gal the week of April 16, 2014, compared to $1.31/gal last year. Conway butane prices rose to $1.25/gal the week of April 16, 2014, from $1.19/gal last year at the same time. Isobutane at Conway increased to $1.80/gal the week of April 16, 2014, compared to $1.20/gal last year.

Pentanes-plus prices experienced steady gains at both hubs on a year-on-year basis due to improved crude oil prices. The Mont Belvieu price rose to $2.29/gal from $1.98/gal last year at the same time while the Conway price increased to $2.30/gal from $2.17/gal last year.

Overall the NGL barrel (bbl) price rose 1% at both hubs the week of April 16 from the previous week with the Mont Belvieu price improving to $43.70/bbl with a 1% drop in margin to $26.53/bbl. The Conway price increased to $44.49/bbl with a slight gain in margin to $27.72/bbl.

The most profitable NGL to make at both hubs was C5+ at $1.80/gal at Conway and $1.77/gal at Mont Belvieu. This was followed, in order, by isobutane at $1.34/gal at Conway and 85 cents/gal at Mont Belvieu; butane at 77 cents/gal at Conway and 79 cents/gal at Mont Belvieu; propane at 70 cents/gal at Conway and 69 cents/gal at Mont Belvieu; and ethane at negative 5 cents/gal at Conway and negative 1 cent/gal at Mont Belvieu.

Natural gas storage levels continue to struggle to reload this injection season as the Energy Information Administration reported an increase of 49 billion cubic feet (Bcf) the week of April 18, the most recent data available. This brought the storage level to 899 Bcf from 850 Bcf the previous week with the largest injection coming from producing regions at 22 Bcf. The storage level is 48% lower than the 1.73 trillion cubic feet (Tcf) posted last year at the same time and 53% lower than the five-year average of 1.907 Tcf.

Cooling demand should remain limited the week of April 30, which should help natural gas injections increase. According to the National Weather Service’s forecast for the week, the bulk of the country (the East Coast, Midwest, Rockies and parts of the Southwest) is expected to experience cooler-than-normal temperatures.

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