US Spot NGLs Prices Plunge Wednesday with Oil Futures
CANYON LAKE, Texas (DTN) -- U.S. spot NGLs prices finished sharply lower at
the major supply hubs Wednesday, pressured by sinking New York Mercantile
Exchange oil futures.
At settlement, NYMEX September West Texas Intermediate crude oil futures
were down $1.87 at $55.23 bbl while nearby RBOB futures were 6.06cts lower at
Energy Information Administration data released midmorning showed U.S.
commercial crude oil supplies rose 1.6 million bbl in the week-ended Aug. 9
to 440.5 million bbl, up 26.3 million bbl or 6.4% from a year ago and about 5%
above the five-year average for this time of year.
Agency data showed domestic crude oil production held steady at 12.3 million
bpd, about 13% above the same time in 2018.
Total U.S. motor gasoline inventories dropped 1.4 million bbl in the week at
233.8 million bbl, almost flat versus the year-ago level.
U.S. inventories of propane/propylene rose about 3.2 million bbl in the
week-ended Aug. 9 to 86.5 million bbl, with a stock build in Gulf Coast PADD 3
accounting for about 80% of the increase.
At 86.5 million bbl on Aug. 9, domestic propane/propylene stocks were up
16.7 million bbl or 24% from a year ago and about 9% above the five-year
average for the same time of year, EIA data shows.
Propane/propylene inventories in Gulf Coast PADD 3 jumped 2.5 million bbl
during the week at 51.6 million bbl while Midwest PADD 2 stocks edged up
200,000 bbl to 24.8 million bbl and East Coast PADD 1 supplies increased
600,000 bbl at 6.7 million bbl.
"We've seen Gulf Coast propane inventories resume building at rates above
the five-year average in the last two weeks --- last week the build was 1.5
million bbl above the five-year average and this week 1.2 million bbl above the
five-year average -- after inventories had about flat-lined from late May
through July," said EnVantage inc. natural gas liquids analyst Peter Fasullo.
"From March through most of May, stocks in PADD 3 also built at well above
the five-year average rate. The builds in PADD 2 during this time have been
very near the five-year average," Fasullo said.
EIA data shows U.S. propane/propylene exports in the week-ended Aug. 9 at
893,000 million bpd, down from 1.294 million bpd in the week prior.
Propane/propylene exports in the four weeks that ended Aug. 9 were at 1.112
million bpd compared with 1.065 million bpd in the same period in 2018.
Four-week average imports were at 108,000 bpd versus 112,000 bpd in the same
period last year.
EIA reported refiner and blender net production of propane/propylene in the
week at 2.259 million bpd, down from a record-high 2.361 million bpd the week
prior but up 313,000 bpd or 16.1% from the year-ago level.
Spot propane traded thinly Wednesday with no deals done at Mont Belvieu
after midday and only one deal transacted at the Conway hub.
At Mont Belvieu on Wednesday, LST spot propane changed hands late morning at
a fresh near 3-1/2 year low 38.25cts gallon, down 2.5cts from the day prior,
while Enterprise spot propane last traded near the same time down 2.125cts at
40cts gallon, a two-month low.
Enterprise spot propane was valued late Wednesday at 30.4% of nearby WTI
crude futures, down from 33% at the same time last week.
Conway spot propane finished more than 3-1/2 year low 31.5cts gallon, down
2.25cts from the day prior.
Crop drying is the wildcard in the Midcontinent in the weeks ahead, said
"Crops were planted late in some parts of the Midwest because of rain and
flooding in the spring and the latest expectations are for a bumper corn crop,
so there is potential for a longer than normal period of crop drying this year.
The trade war could also mean that a lot of corn will go into storage for an
extended time and that corn would have to be dried to lower-than-normal
moisture levels, requiring larger-than-normal volumes of propane," Fasullo
Hattiesburg spot propane did not trade on ICE Wednesday. "Looking at the
market this afternoon it seems like the Hattiesburg-Mt. Belvieu spread came in
about a penny or a penny and a half," said a market source.
In other NGLs spot markets, non-LST normal butane slid 2.25cts at 47.5cts
gallon, a more than two-week low, while Conway normal butane traded down 1.5cts
at 32.5cts gallon.
Non-LST isobutane was seen at 55.5cts gallon, down 6cts, while Conway
isobutane edged down 0.5cts at 44.75cts gallon.
Non-LST natural gasoline traded at 100cts gallon, down 3cts from the day
prior, while Conway natural gasoline dropped 2.5cts at 98.5cts gallon.
Gulf Coast purity ethane which done at 15.5cts gallon, down 0.875cts from a
three-week high the day prior.
In related markets, NYMEX September natural gas futures settled 0.4cts lower
at $2.143 MMBtu.
Alton Wallace, 1.832.646.9229, Alton.Wallace@dtn.com, www.dtn.com.
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