In the spring a young man’s fancy lightly turns to thoughts of rising natural gas prices.

At the risk of having my poetic license revoked, I have to ask: what’s not to love about the annual spring rally? Besides, consider these lines from “Locksley Hall:”

“Here about the beach I wander’d, nourishing a youth sublime

With the fairy tales of science, and the long result of Time.”

Seems like Lord Tennyson is clearly referring to fossil fuels ... or how long it takes to secure an environmental impact statement necessary to obtain a permit to build a pipeline.

Anyway, NGL prices rose almost across the board last week, accompanied by a slew of widening frac spread margins. The hypothetical NGL barrel at Mont Belvieu, Texas, was up 3.8% and the corresponding barrel at Conway, Kan., rose 5.6%.

Not since mid-February have ethane prices cracked 24 cents per gallon (gal) at Mont Belvieu and 21 cents/gal at Conway. The spread moved into positive territory at both hubs and while rejection levels are still high, En*Vantage Inc. expects ethane inventories to drop over the next six months, reaching 43.2 million barrels by July. The estimate for January was 50.1 million barrels.

By En*Vantage’s estimates, January’s inventory supply of 42 days will diminish to less than 30 days by the fourth quarter, when higher cracking and export demand kick in.

“By 2018, Mont Belvieu ethane frac spreads will need to increase to 20 cents/gal to drop ethane rejection west of the Marcellus/Utica to below 160,000 barrels per day [Mbbl/d] to meet growing ethane demand,” the analysts say.

Propane, up about 12% in the past two weeks at both hubs, is well-positioned for interesting times.

The number to watch, says En*Vantage, is 900 Mbbl/d. U.S. propane supplies are insufficient to support exports above that mark, which means that an additional 1.7 MMbbl per week are needed. The analysts don’t expect supply to increase this year, though, so inventories will be drawn down or inventory builds for the remainder of the year will be limited to keep those foreign customers satisfied.

“The implication of tighter propane balances is that at some point this year, U.S. propane prices will need to increase,” En*Vantage said, estimating that it will take a 25% cut in exports get them back under control. “Since propane exports have proven to be fairly inelastic to narrowing export spreads, it is entirely possible that later this year we could see Mont Belvieu propane selling at a premium to propane in Asia and Europe.”

Butanes rose 5% at Conway, and reached as high as 7% in the past week for normal butane at Mont Belvieu, with isobutane up 5%.

Storage of natural gas in the Lower 48 increased by 10 billion cubic feet (Bcf) in the week ended April 7, the U.S. Energy Information Administration reported. The increase, more than the Bloomberg consensus of 9 Bcf, resulted in a total of 2.061 Tcf. The figure is 16.8% less than the 2.477 Tcf figure at the same time in 2016 and 14.6% above the five-year average of 1.798 Tcf.

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

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