NGL prices improving, largely driven by propane prices
YTD, Mt. Belvieu NGL prices have declined 3%. However, after hitting a YTD low on 21 June 2013, NGL prices have increased 17%, largely driven by improving propane prices. In addition, we note NGL prices have started to recouple with WTI crude oil prices. For propane in particular, it appears recent incremental
export capacity coming online has positively impacted prices. While NGL prices remain relatively weak, improvement in NGL prices may bode well for some gathering and processing (G&P) MLPs
As usual, my posts are the first ones to announce any newsworthy items (vs. those who would rather post rancid opinions and out of date data). To wit, the driver behind today's incremental rise in many MLPs are due to the small but potentially meaningful rise in NGL prices. This also confirms my initial post first thing this morning:
NGLs are made up of different compounds that receive different prices, and production streams are largely ethane and propane
According to a presentation by the Midstream Energy Group, the average NGL barrel composition is ~43% ethane, ~28% propane, ~7% normal butane, ~9% isobutane, and ~13% pentanes or heavier hydrocarbons. Using this representative composite barrel, NGL prices were up, closing at $36.95 per barrel on August 9 compared to $36.63 per barrel for the week ended August 2, which is a positive short-term indicator for companies with NGL production.
The representative NGL barrel traded as high as ~$39 per barrel in mid-March, but since then, prices had largely declined, resulting in a medium-term negative indicator as well. Over the past several weeks, NGL prices had recovered somewhat, as WTI crude oil prices have shot to levels above $105 per barrel.
Natural gas liquids prices have largely tracked crude oil prices historically. However, over recent years, the composite barrel as a percentage of crude price has declined. This is because ethane and propane make up a large percentage of the average NGL barrel, but these two commodities especially have experienced a surge in supply due to the shale boom and have experienced a decline in prices. Though oil prices decreased last week, as did most NGL prices, propane prices increased enough to cause the entire NGL composite barrel to increase. Propane prices may have increased due to distinctive supply and demand for that particular NGL. Much of propane demand is driven by residential and commercial usage (such as heating in winter months and grilling in the summer.
Nice copy and paste. Your earlier post, referring to the posters here as a bunch of morons, is self inclusive, as you are a prolific poster here. Using 'moron' indicates it has somehow attached itself in your vocabulary, a self revealing. Perhaps you are also in fear of losing your job, and feel the need to show your inflated self worth. There is no value to you