US Spot NGLs Finish mostly Lower with NYMEX Oil Futures

    

   HOUSTON (DTN) -- U.S. spot propane prices ended mostly lower at the major 
supply hubs Wednesday, pressured by declining New York Mercantile Exchange oil 
futures.

   At settlement, NYMEX January West Texas Intermediate crude oil futures were 
down 50cts at $51.15 bbl while nearby RBOB futures were 1.94cts lower at 
$1.4204 gallon.

   EIA midmorning reported U.S. inventories of propane/propylene dropped 3.2 
million bbl in the week-ended Dec. 7 to 76.6 million bbl with a stock draw of 
1.7 million bbl in Gulf Coast PADD 3 while supplies in Midwest PADD 2 and East 
Coast PADD 1 were down 900,000 bbl and 300,000 bbl, respectively. 

   As of Dec. 7, domestic propane/propylene supplies are up 1.9 million bbl or 
2.5% from the same time in 2017 but down about 5% versus the five-year average 
for the same time of year, EIA data showed.

   EIA reported U.S. commercial crude oil supplies fell about 1.2 million bbl 
in the week to 442.0 million bbl, which was down 1.0 million bbl or 0.2% from 
the same time in 2017.

   Total U.S. motor gasoline inventories rose about 1.2 million bbl during the 
week to 227.5 million bbl and were up about 1.8 million bbl or 0.8% from the 
year-ago level.

   Agency data shows U.S. propane/propylene exports at 607,000 bpd in the week 
ended Dec. 7, down from 1.052 million bpd in the week prior. Four-week average 
exports were at 969,000 bpd compared with 888,000 bpd in the same period in 
2017. Four-week average imports were at 153,000 bpd versus 193,000 bpd in the 
same period last year.

   Spot propane traded briskly at the Texas supply hubs on ICE early Wednesday, 
but only a couple of deals were transacted after January WTI futures sold off 
just before settlement. Wednesday deal-volume at the LST, Enterprise, Targa and 
Conway supply hubs was at 150,000 bbl, 225,000 bbl, 40,000 bbl, and 70,000 bbl, 
respectively. 

   At Mont Belvieu, LST spot propane last traded late morning at 70.75cts 
gallon, up 1.375cts, while Enterprise spot propane was done 0.625cts higher 
near market close at 69.0cts gallon.

   Enterprise spot propane was valued late session at 56.7% of nearby WTI crude 
futures, down from 59.2% at the same time last week.

   Targa spot propane traded midafternoon at 70.0cts gallon, up 1.0cts on the 
session.

   Conway spot propane changed hands near market close at 66.0cts gallon, down 
0.375cts with its discount to Enterprise spot propane at 3.0cts gallon, a 
four-session high.

   EIA data showed domestic implied demand for propane/propylene in the 
week-ended Dec. 7 at 1.997 million bpd, which compared with 1.321 million bpd 
in the week prior and 1.388 million bpd in the same week last year.

   Refiner and blender net production of propane/propylene was at 1.9512 
million bpd, down 61,000 bpd from the week prior but up 42,000 bpd or 2.2% from 
the year-ago level.

   EnVantage Inc. natural gas liquids analyst Peter Fasullo said his firm's 
shipping survey showed exports of almost 1.2 million bpd last week, about 
500,000 bpd more than EIA reported. Fasullo said this was the first time in 
more than a month that his firm's export number differed significantly from the 
EIA's.

   The 3.2 million bbl draw on propane/propylene stocks in the most recent 
report week compared with a 1.0 million bbl build in the same week last year, 
said Fasullo.

   "So last week represented a 4.2 million bbl swing versus the previous-year 
stock level," he said. "On Nov. 9 stocks were about 8 million bbl above the 
previous year, and that surplus has been whittled down by strong exports and 
supportive weather. For the week ahead, however, we're unlikely to see a draw 
as large as the 4.1 million bbl last year," Fasullo said.

   In other NGLs spot markets, Mt. Belvieu non-LST normal butane traded late 
session 78.0cts gallon, down 1.0cts, while Conway normal butane was 0.25cts 
lower at 76.25cts gallon.

   Non-LST isobutane slid 3.75cts Wednesday at 80.25cts gallon while Conway 
isobutane was valued at 94.0cts gallon, up 4.0cts.

   Mt. Belvieu non-LST natural gasoline finished 0.5cts lower at 109.25cts 
gallon, its discount up 1.5cts to 2.0cts gallon. 

   Conway natural gasoline, which was down 4.0cts near midday at 94.0cts 
gallon, a 27-month low, was up 3.5cts in afternoon trade at 101.5cts gallon.

   Mt. Belvieu e/p mix was assessed at 27.75cts gallon, down 2.25cts, while 
Conway e/p mix was valued 2.0cts lower at 23.5cts gallon.

   Gulf Coast purity ethane dropped 1.25cts Wednesday to 29.75cts gallon, a 
five-week low.

   In related markets, nearby NYMEX January natural gas futures slid 27.1cts to 
a $4.136 MMBtu settlement, a near four-week low on the spot continuation chart.

   Alton Wallace, 1.832.646.9229, Alton.Wallace@dtn.com, (c) 2018 DTN. All 
rights reserved