Due to the Thanksgiving Day holiday, Frac Spread will not appear next week. It will return on Dec. 5.

The Mont Belvieu, Texas, hypothetical NGL barrel hit a six-month high last week, breaching $23 for the first time since mid-May.

The 2.1% weekly rise, which extended the barrel’s rally to seven weeks, was bolstered by a 4.9% jump in normal butane. That increase in normal butane, combined with a 2.6% drop in the price of Mont Belvieu isobutane, narrowed the spread between the butanes to just over 5 cents per gallon (gal), compared to 10.6 cents/gal last week and 28.5 cents/gal at the start of October.

Frac spread

EnVantage Inc. partly attributed the quick contraction in the isobutane to normal butane price spread to a sudden higher demand.

“Export demand for normal butane remains strong as well as season demand for n-butane as a blendstock for producing winter grade gasoline,” the analysts wrote in a recent report.

EnVantage has also suspected that maintenance work on the Enterprise Products Partners butane isomerization plant at Mont Belvieu is a cause for the price increase. The work is in anticipation of the company’s new isobutene dehydrogenation plant that is scheduled to start up before the end of 2019. That facility will be capable of producing 425,000 tons per year of isobutylene, Enterprise said when it announced the project in early 2017.

NGL prices

Continental Resources Inc. founder Harold Hamm touched on struggling NGL prices on Nov. 20 in his opening keynote at the DUG Midcontinent Conference and Exhibition in Oklahoma City.

“That will correct,” he told attendees. “At present, it’s under a lot of pressure.”

West Texas Intermediate (WTI) crude oil closed up 3% at just above $57 per barrel on Nov. 20 as the 1.4 million barrel build in U.S. inventories was slightly less than the 1.6 million barrels expected by analysts.

OPEC+ will meet in early December to decide whether deeper production cuts are needed. Also on the radar are talks between the U.S. and China and whether the two economic powers can make progress on reaching a trade agreement. Trade experts now see completion of a “phase one” deal as not likely until next year. China wants more extensive tariff rollbacks than the Trump administration is willing to offer, and the U.S. is seeking resolution on intellectual property and technology transfer issues.

resin prices

In the week ended Nov. 15, storage of natural gas in the Lower 48 experienced a decrease of 94 billion cubic feet (Bcf), the Energy Information Administration (EIA) reported. That compared to the Stratas Advisors expectation of an 80 Bcf withdrawal and the FX Empire median expectation of an 89 Bcf withdrawal. The EIA figure resulted in a total of 3.638 trillion cubic feet (Tcf). That is 16.2% above the 3.132 Tcf figure at the same time in 2018 and 1.6% below the five-year average of 3.698 Tcf.

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