LPG Prices Likely to Rise With Brent Crude

Qatar controls nearly 35% of global liquefied natural gas (LNG) production, delivering nearly 20% of Britain’s annual natural gas demand. However, the country’s renowned energy sector is more focused on establishing the right balance between reserves and production, economic diversification, and the degree of depletion. This is being driven by Qatar Petroleum (QP), an integrated national oil corporation that stands at the forefront of efforts for long-term sustainable development, utilization, and monetization of oil and gas reserves in Qatar.

QP also operates long-term strategic partnerships with major international companies, most notably Royal Dutch Shell through LNG, gas-to-liquids (GTL), shipping, and international investments. As such, the sector is facilitating advanced technological innovation, contributing to the development of a highly skilled workforce, while providing economic stability and a cleaner source of energy for Qatar and the world. As the largest international investor in the country, Shell has invested more than $20 billion in Qatar since 2006 to build a highly material business committed to delivering long-term value for the State of Qatar and Shell for decades to come.

With Brent crude oil, the international benchmark, having increased to just more than $55/bbl, LPG prices are also likely to rise in price. Spot buying interest has continued to support the large propane and butane markets in Northwest Europe, while trading activity remains extremely slow. April propane prices for large, fully refrigerated cargos are at $379 per tonne cif Amsterdan, Rotterdam, and Antwerp (ARA) and butane prices also stand at $379 per tonne ARA, with both prices having marginally weakened before strengthening.

The propane coaster market remains quiet, but the butane market has been active with demand from petrochemical manufacturers and blenders. The latest indication of propane spot deals are May 2017 $374-$378 per tonne cif Northwest Europe and June 2017 $375-$379 per tonne cif Northwest Europe. North Sea prices for April 2017 are at $345.50 per tonne fob North Sea terminals for propane and at $357 per tonne fob North Sea terminals for butane, with both products having softened, by $63 per tonne for propane and by $92 per tonne for butane.

In the Mediterranean there is a reasonable amount of spot trading, with the butane market lengthening. Large, fully refrigerated cargos are at $489 per tonne cif Lavera, south of France for propane and at $439 per tonne cif Lavera for butane, with propane having dropped $33 per tonne and butane having increased by $21 per tonne since the beginning of April. Sonatrach, the national oil company of Algeria, set new contract prices for April at $350 per tonne fob Skikda and Bethouia for propane and at $380 per tonne fob Bethouia for butane, with both products having softened—by $55 per tonne for propane and $10 per tonne for butane. The Saudi Arabians negotiated new contract prices at $430 per tonne fob Middle Eastern (ME) terminals for propane and at $490 per tonne fob ME terminals for butane, with both prices having softened—by $50 per tonne for propane and $110 per tonne for butane. In the Far East, buying interest for product moved from the end of April into May.