The Market Looks Toward Spring

(March 23, 2018) — OPEC and countries outside the oil cartel, including Russia, have agreed to keep production curbed as they seek to shrink global stockpiles further to prop up prices above $60 (U.S.) per barrel. After days of debate focusing on how long to prolong oil cuts, 24 countries that control 60% of global product have pledged to keep 1.8 MMbbld off the market next year.

With oil prices hovering around the $64.50/bbl mark, LPG prices could harden. The large propane and butane markets are gradually becoming less active as winter disappears. Propane prices for fully refrigerated cargoes are at $421 per tonne cif Amsterdam/Rotterdam/Antwerp (ARA) and at $437 per tonne for butane.

The latest indication of propane swap deals are April $415-$419 per tonne cif Northwest Europe, and May $423-$427 per tonne. North Sea prices are at $470 per tonne fob North Sea terminals for propane and at $474.50 per tonne for butane.

In the Mediterranean, once the cold spell has gone the market can only go in one direction—down. The bad weather in the Mediterranean may have caused some delays, but did not impact demand. Prices for large, fully refrigerated cargoes of propane are at $448 per tonne cif Lavera, south of France, and at $445 per tonne cif Lavera for butane. Sonatrach, the Algerian national oil company, set LPG contract prices for March at $430 per tonne fob Skikda and Bethouia for propane and at $440 per tonne fob Bethouia for butane. The Saudi Arabians negotiated contract prices for March at $480 per tonne fob Middle Eastern (M.E.) terminals for propane and at $465 per tonne fob M.E. terminals for butane.

Some examples of large LPG shipping fixtures include the 9500-cu-meter-capacity Epic Manhattan, which was chartered by Cepsa (Madrid) to load 4000 tonnes of butane from Huelva for the delivery option Agadir. The Mathrahi, 22,500 cu meter capacity, was fixed by Petredec (Bermuda) to load a full cargo of butane for delivery options Morocco on the West Coast of Africa.

The Gas Commerce 005, 78,432 cu meter capacity, was taken by HPCL (Hindustan Petroleum Corp. Ltd.; Mumbai) to load 44,000 tonnes of LPG from Ras Laffan for delivery options India. The Kikyo 005, 82,521 cu meter capacity, was chartered by IOC (Indian Oil Corp.; New Delhi) to load 44,000 tonnes of LPG from Ras Tanura for delivery options India.

The VLGC shipping market in the West has been quiet due to a conference in Tokyo attended by most players.

(SOURCE: The Weekly Propane Newsletter, March 26, 2018 ed. The Weekly Propane Newsletter is the propane industry’s trusted source for all the latest posted and spot prices from every major terminal and refinery around the U.S. Propane professionals benefit from a center spread of posted prices, which includes hundreds of postings completely updated and delivered to inboxes twice weekly. For market analysis, insighful commentary, and global reporting not found elsewhere, The Weekly Propane Newsletter is sought out by propane industry insiders. One single pricing update could be all it takes to increase profit. The Weekly Propane Newsletter also provides reputable, third-party pricing verification for index-pricing clients. Available by subscription at BPNews.com.)