Mont Belvieu propane value plunges on weekly propane stocks build
2015/6/4 view:
Mont Belvieu non-LST propane prices plunged 4.125 cents Wednesday morning to 40.125 cents/gal on the IntercontinentalExchange, following bearish storage data from the US Energy Information Administration.
The drop in price was also impacted by a lower NYMEX crude futures contract. But the drop in non-LST propane was much steeper than crude values.
Non-LST propane reflects prices at the Enterprise Products Partners' storage terminal at Mont Belvieu, Texas.
Non-LST propane was pricing at 30.21% of the NYMEX July crude futures contract Tuesday, according to Platts 3:15 pm EDT (1915 GMT) assessment.
At 40.125 cents/gal, the non-LST propane was pricing at 27.88% of the NYMEX July WTI futures contract, which was trading at $60.45/barrel at 10:20 am EDT.
Propane prices closely tracks the NYMEX crude futures.
The non-LST propane has traded at a lower relative value than 27.88% between May 26 and May 28, at 25%, when brine contamination due to heavy rain in the region made it difficult to inject additional products into the storage caverns in Mont Belvieu.
LST propane also showed a similar downward trend in price and relative value against crude futures, falling 4 cents to 41.25 cents/gal, priced at 28.66% of NYMEX crude futures compared to 30.98% Tuesday.
The decline in price was mainly influenced by last week's propane and propylene stocks build.
US propane and propylene stocks rose 3.828 million barrels to 77.046 million barrels, reaching a new historic high, in the week ended May 29, EIA data showed Wednesday. This resulted mainly from the 2.338 million-barrel rise in US Gulf Coast stocks, while demand for propane fell.
The 3.828 million-barrel increase was the second highest week-on-week stocks build reported by the EIA since it started reporting the storage data on March 5, 1993. The highest weekly increase was reported on July 4, 2014, when the stocks rose 2.833 million barrels.
Even though last week's build was only 142,000 barrels more than the previous year, current US stocks stand 31.27 million barrels higher than last year's ending stocks for the corresponding week. The stocks are also 31.645 million barrels higher than the previous five-year average for the same week, EIA data showed.
Gulf Coast stocks rose 2.338 million barrels to 50.195 million barrels. The build was 375,000 barrels higher than the same time last year and 1.215 million barrels more than the previous five-year average build for the corresponding week.
Gulf Coast stocks are also at a record levels, showing 25.58 million barrels higher than last year's ending stocks and 26.96 million barrels more than the previous five-year average for the corresponding week.
Midwest stocks rose 1.1 million barrels to 19.762 million barrels.
Midwest stocks stand 3.69 million barrels higher than last year's ending stocks for the corresponding week. The stocks are also 2.44 million barrels higher than the previous five-year average for the same week, EIA data showed.
Meanwhile, Conway propane was trading at 35.25 cents/gal in the IntercontinentalExchange on Wednesday morning, 4.5 cents lower than Platts 3:15 pm EDT (1915 GMT) Tuesday assessment.
The drop in price was also impacted by a lower NYMEX crude futures contract. But the drop in non-LST propane was much steeper than crude values.
Non-LST propane reflects prices at the Enterprise Products Partners' storage terminal at Mont Belvieu, Texas.
Non-LST propane was pricing at 30.21% of the NYMEX July crude futures contract Tuesday, according to Platts 3:15 pm EDT (1915 GMT) assessment.
At 40.125 cents/gal, the non-LST propane was pricing at 27.88% of the NYMEX July WTI futures contract, which was trading at $60.45/barrel at 10:20 am EDT.
Propane prices closely tracks the NYMEX crude futures.
The non-LST propane has traded at a lower relative value than 27.88% between May 26 and May 28, at 25%, when brine contamination due to heavy rain in the region made it difficult to inject additional products into the storage caverns in Mont Belvieu.
LST propane also showed a similar downward trend in price and relative value against crude futures, falling 4 cents to 41.25 cents/gal, priced at 28.66% of NYMEX crude futures compared to 30.98% Tuesday.
The decline in price was mainly influenced by last week's propane and propylene stocks build.
US propane and propylene stocks rose 3.828 million barrels to 77.046 million barrels, reaching a new historic high, in the week ended May 29, EIA data showed Wednesday. This resulted mainly from the 2.338 million-barrel rise in US Gulf Coast stocks, while demand for propane fell.
The 3.828 million-barrel increase was the second highest week-on-week stocks build reported by the EIA since it started reporting the storage data on March 5, 1993. The highest weekly increase was reported on July 4, 2014, when the stocks rose 2.833 million barrels.
Even though last week's build was only 142,000 barrels more than the previous year, current US stocks stand 31.27 million barrels higher than last year's ending stocks for the corresponding week. The stocks are also 31.645 million barrels higher than the previous five-year average for the same week, EIA data showed.
Gulf Coast stocks rose 2.338 million barrels to 50.195 million barrels. The build was 375,000 barrels higher than the same time last year and 1.215 million barrels more than the previous five-year average build for the corresponding week.
Gulf Coast stocks are also at a record levels, showing 25.58 million barrels higher than last year's ending stocks and 26.96 million barrels more than the previous five-year average for the corresponding week.
Midwest stocks rose 1.1 million barrels to 19.762 million barrels.
Midwest stocks stand 3.69 million barrels higher than last year's ending stocks for the corresponding week. The stocks are also 2.44 million barrels higher than the previous five-year average for the same week, EIA data showed.
Meanwhile, Conway propane was trading at 35.25 cents/gal in the IntercontinentalExchange on Wednesday morning, 4.5 cents lower than Platts 3:15 pm EDT (1915 GMT) Tuesday assessment.
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