Sunday, January 26, 2014
Midwest Spots Spike on Inventory Draw
It was all about the Midwest late in the week as spot propane in the Group 140 (Conway, Kan.) market rocketed nearly 20 cents higher following the release of the Jan. 15 inventory report by the Energy Information Administration. While a deep 3.8-MMbbl draw was reported for the nation as a whole the week ended Jan. 10, 1.5 MMbbl of that in the Midwest, stocks in the heartland were left at a startlingly low 11.5 MMbbl, with a long stretch of the winter heating season left to go. Market watchers stated the obvious, "We could run out."
Marketers since fall have been chasing precious gallons, wherever and whenever they can find them, all the while paying premium prices, if in fact a barrel can be found at all. And while headlines trumpet the U.S. energy revolution that is under way, heralding the nation's move from an era of energy supply scarcity to one of abundance, that case has been hard to prove to propane retailers this fall in winter. At the same time transports and railcars race to fill supply gaps throughout the nation, an estimated 11 MMbbl a month is being exported to offshore markets where domestic prices are even higher than here. It appears U.S. consumers will have to pay the higher international prices for propane before the market balances.
Bids and offers in the Group mid-morning Thursday were at 158.00-161.00 cents/gal., higher by an astounding 19.125 cents for buyers and 21.5 cents for sellers compared to the Monday email Update. Conway's premium to Mont Belvieu as of that trading day stood at an amazing 29 cents.
With the Midwest market in flux, low and high deals done were posted at a wide 154.00 and 162.50 cents.
Mont Belvieu non-LST spots stood at 128.875-129.375 cents/gal., edging up from Monday by 1.625 cents for buyers and sellers. Low and high trades reported as of press time were at 129.375 and 129.50 cents. LST spots, at 129.125-129.875 cents/gal., rose 1.625 cents for buyers and 1.875 cents for sellers over the week, with deals done at 129.00 and 129.50 cents.
And while supplies are tight and prices are high and rising throughout the U.S., it's the same deal for our northern neighbors in Canada this winter. Edmonton spot propane Thursday was trading at a wide 171.50-180.00 cents/gal., up a sharp 12 cents for buyers and 20.25 cents for sellers from early-week activity. Sarnia spots, at a never-before-seen 221.375-221.50 cents/gal., rose 2.5 cents for buyers and 2 cents for sellers over the week.
It was all about the Midwest late in the week as spot propane in the Group 140 (Conway, Kan.) market rocketed nearly 20 cents higher following the release of the Jan. 15 inventory report by the Energy Information Administration. While a deep 3.8-MMbbl draw was reported for the nation as a whole the week ended Jan. 10, 1.5 MMbbl of that in the Midwest, stocks in the heartland were left at a startlingly low 11.5 MMbbl, with a long stretch of the winter heating season left to go. Market watchers stated the obvious, "We could run out."
Marketers since fall have been chasing precious gallons, wherever and whenever they can find them, all the while paying premium prices, if in fact a barrel can be found at all. And while headlines trumpet the U.S. energy revolution that is under way, heralding the nation's move from an era of energy supply scarcity to one of abundance, that case has been hard to prove to propane retailers this fall in winter. At the same time transports and railcars race to fill supply gaps throughout the nation, an estimated 11 MMbbl a month is being exported to offshore markets where domestic prices are even higher than here. It appears U.S. consumers will have to pay the higher international prices for propane before the market balances.
Bids and offers in the Group mid-morning Thursday were at 158.00-161.00 cents/gal., higher by an astounding 19.125 cents for buyers and 21.5 cents for sellers compared to the Monday email Update. Conway's premium to Mont Belvieu as of that trading day stood at an amazing 29 cents.
With the Midwest market in flux, low and high deals done were posted at a wide 154.00 and 162.50 cents.
Mont Belvieu non-LST spots stood at 128.875-129.375 cents/gal., edging up from Monday by 1.625 cents for buyers and sellers. Low and high trades reported as of press time were at 129.375 and 129.50 cents. LST spots, at 129.125-129.875 cents/gal., rose 1.625 cents for buyers and 1.875 cents for sellers over the week, with deals done at 129.00 and 129.50 cents.
And while supplies are tight and prices are high and rising throughout the U.S., it's the same deal for our northern neighbors in Canada this winter. Edmonton spot propane Thursday was trading at a wide 171.50-180.00 cents/gal., up a sharp 12 cents for buyers and 20.25 cents for sellers from early-week activity. Sarnia spots, at a never-before-seen 221.375-221.50 cents/gal., rose 2.5 cents for buyers and 2 cents for sellers over the week.
