Mont Belvieu and Conway Spots Slide

Spot propane at Mont Belvieu and Conway, Kan. retreated Thursday from mid-week highs that saw Belvieu soar to the 110.00-111.000 cents/gal. range and Conway jump to 109.25-110.00 cents and higher. Thursday saw prices at the Texas trading hub decline 1.5 cents compared to the Monday email Update, while Midwest spots were off a sharper 3.375 cents for the week, losses that don’t reflect a steeper plunge from the middle of the week. Prices at both market centers rallied between the two reporting periods, buoyed by stronger crude oil values and with what some market watchers described as short covering by larger players with positions to cover.
In addition, colder weather swept through the Heartland, and out-month prices hardened. With Wednesday’s release of the Energy Information Administration’s (EIA) inventory report that showed a 1.4-MMbbl week-over-week stock build for propane for the U.S., well exceeding expectations of a 0.9-MMbbl rise, some of the steam went out of the markets, although crude temporarily maintained its gains. That 1.4-MMbbl build brought U.S. volumes to nearly 77.5 MMbbl as the crop drying and winter heating season approaches. Meanwhile, after prices drew nearly even mid-week, by Thursday Belvieu’s premium to Conway had stretched out to as much as 2.375 cents.

Mont Belvieu non-LST propane mid-morning Thursday was trading at 107.25-107.50 cents/gal., off 1.5 cents for buyers and 2.625 cents for sellers compared to Monday. Low and high deals done as of press time were reported at 107.25 and 108.25 cents. LST spots, a quarter-cent higher at 107.50-107.75 cents/gal., dipped 1.5 cents for buyers and 2.5 cents for sellers over the week. Low and high trades were posted at 107.25 and 108.50 cents.

The Group 140 (Conway) bid and offer was at 105.125-105.875 cents/gal., down a steep 3.375 cents for buyers and 3.125 cents for sellers. Low and high deals done as of mid-morning were at 104.625 and 106.25 cents.

Canadian spots headed in the other direction over the week and saw significant strengthening. Edmonton propane Thursday was trading at 93.00-94.50 cents/gal., up a marked 17 cents for buyers and 12 cents for sellers. Sarnia spots, at 116.00-116.75 cents/gal., jumped a more moderate 4 cents for buyers and 4.25 cents for sellers over the same period.
Elsewhere, other commodities also lost ground following EIA’s Wednesday stock reports. NYMEX crude oil for November delivery Thursday lost 36 cents to trade at $92.84/bbl during morning hours. Crude inventories rose by 3.7 MMbbl, compared to expectations for a decline. Meanwhile, natural gas for October delivery tumbled 7.4 cents to trade at $3.942/MMBtu upon news inventories rose by 90 Bcf.