While we’re on the subject of OPEC (we’ve never really drifted far from that topic since 1973), the cartel will decide on May 25 in Vienna whether to extend its production cut agreement when it expires in June.

Conventional wisdom leans toward a global crude oil glut and lower prices if the agreement is not extended. Goldman Sachs Group Inc. has a different take.

In a research note, the global investment banking giant said it believed that the oil market was managing to rebalance on its own, despite record U.S. inventories. Goldman inferred that OPEC’s goal is to accelerate oil stockpile withdrawals in member countries of the OECD, but not allow those inventories to descend to levels that are too low.

If that were to happen, Goldman projects that oil prices would approach $65 per barrel, which might sound pretty good to U.S. producers but not to the bankers.

At $65, West Texas Intermediate was in the lower $50s in April, “activity levels will ramp up in most regions, making the extended cuts self-defeating,” the Goldman report said.

Global crude output and prices may ultimately remain static, but the resulting volatility would not be good for anybody’s ulcer.

Nor would a near-month comparison of NGL prices. The hypothetical NGL barrel’s average price at Mont Belvieu, Texas, for March fell 19.1% from February’s price. The tumble was 18.2% at Conway, Kan.

Taking a step back, the first-quarter 2017 Mont Belvieu barrel was 9.5% below fourth-quarter 2016. At Conway, the decrease was 13.7%.

But put the Tums away. A more apples-to-apples type of comparison is the same time period, year-to-year. Here, things look a little more appetizing.

At Mont Belvieu, the March NGL barrel price was 32.6% higher than in March 2016. At Conway, the increase was 38.2%. First-quarter 2017 at Mont Belvieu was 47.3% over the 2016 mark. Conway’s first-quarter price beat 2016 by 47.6%.

The barrels’ bounce is reflected in the components and the proof is in the propane. The March price for propane at Mont Belvieu was 36% higher than the March 2016 price, despite a 20.3% falloff from February’s price. At Conway, the March 2017 advantage was 37.3% and the one-month price decline was 18.7%.

The sharp divide is echoed by ethane, which saw its first-quarter 2017 price at Mont Belvieu rise 44% over first-quarter 2016.

Joseph Markman can be reached at jmarkman@hartenergy.com or 713-260-5208.

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