The costs for lp at the US Midcontinent trading hub of Conway over the Mont Belvieu Non-LST cost went down 2.9 cents/gal this week, with sources saying the storage space capability of gas liquids manufacturers in the Midcontinent might be reaching its upper limits.
On Thursday, the premium for Conway gas was heard at 35 points over Thursday's Platts Mont Belvieu Non-LST assessment of $1.0215/ gal.
The costs for Conway gas has actually averaged 2.75 cents/gal above Mont Belvieu thus far in August and balanced 2.4 cents in July.
"Any individual that brings in y-grade to Conway fractionation centers-- big gamers like Oneok, DCP Midstream, Phillips 66, Venture Products Partners, BP-- may not have enough storage," claimed a Midwest propane investor.
"Possible customers like stores and also wholesalers who have storage capability available desire a lower price. So some have actually most likely been holding out on filling up in the hope that prices will go down," the resource stated.
In the 2013-4 winter season, reduced inventories plus greater need for plant drying out and also heating up propane saw costs enter the Midwest.
The Conway rate briefly topped $4/gal in January as bitter cool brushed up the area. At that time, the Mont Belvieu rate was trading continuously around $1.50/ girl.
On Wednesday, United States Power Information Administration information showed Midwest stocks in the week that ended August 15 increased 1.05 million barrels to 24.5 million barrels.
click here in supplies reported in the most current week was 71% greater than the five-year standard, however the stocks complete is still 4.5% below the five-year average for the similar week.
According to Bentek Energy, a system of Platts, Midwest production increased about 20% from approximately 175,000 b/d in between April 1 and also August 31, 2013, to 211,000 b/d in between April 1 and also August 20, 2014.
Considering That June, Conway gas has actually consistently traded at a premium to Mont Belvieu, after the month of June revealed very weak inventory constructs and concerns increased about one more period of high gas demand due to US Department of Agriculture projections of one more bumper corn harvest.
In its most recent projection, USDA changed its 2014 production prognostication over 14 billion bushels, the largest on document, elevating its output forecast by 172 million bushels compared with its July forecast.
Existing information show a progressive rise in Midcontinent stocks, however if the USDA corn production projection bears fruit after that experts believe the area might face another propane price shock due to strong need during plant drying season.
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