NGL prices experienced an uptick in early April as storage levels remained lower than in past years for most products. The product with the most volatility was propane.

Despite having a faster buildup in stock levels from last year, stronger export demand is causing an increase in consumption levels. Should this situation continue until the end of summer, it is likely that there will be shortages, particularly at the Conway, Kan., NGL hub come the next heating season.

The possibility of a tight market in the fall helped push prices up 4% to $1.13 per gallon (/gal) at Conway, its highest price since $1.14/gal the week of Feb. 26. The Mont Belvieu, Texas, hub price increased 3% to $1.12/gal, its highest price since it was $1.29/gal the week of Feb. 19. LPG demand from exports is increasing as new terminals and projects are brought online.

Ethane prices continue to struggle as a large number of crackers along the Gulf Coast are down for maintenance. This caused the Conway price to drop 10% to 25 cents/gal and hold firm at 30 cents/gal at Mont Belvieu. The Conway price was the lowest price at the hub since it was 20 cents/gal the week of Feb. 5.

Heavy NGL prices improved across the board at both hubs as West Texas Intermediate (WTI) crude prices traded above $103 per barrel as prices were supported by the Russia-Ukraine crisis. It is likely that WTI crude prices have plateaued and will decrease going forward as there is a growing glut of domestically produced supplies. However, gasoline demand continues to climb and could further increase this summer, according to Barclays Capital’s “Energy Market Outlook.”

Such dichotomies between domestic crude trending toward the low end while gasoline trends higher is a reflection of the interconnected relationships experienced by energy commodities. Unfortunately for domestic producers, the U.S. ban on crude exports makes it extremely difficult to rectify the supply overhang or benefit from higher international prices the way NGL producers can with LPG exports and soon LNG exports.

Isobutane and C5+ prices experienced the biggest upticks in heavy NGL. Mont Belvieu C5+ increased 3% to $2.29/gal, its highest price since it was $2.32/gal in February 2013. The Conway price rose 2% to $2.31/gal, the third straight week the Midcontinent price outperformed its Gulf Coast counterpart. This was the hub’s second-highest price in more than two years.

Conway isobutane experienced a 4% increase to $1.64/gal as alkylation units were impacted by refinery turnarounds. This was the highest price at the hub since it was the same level in October 2013. The Mont Belvieu price rose at a slower pace of 2% to $1.31/gal, its highest price since the end of February.

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