Friday, March 13, 2015
Spot propane at Mont Belvieu and Conway, Kan. lost additional value Thursday, March 12, building on the March slide that has seen Texas and Midwest spots each shed about 6 cents. Market watchers note warming temperatures are weighing on propane and crude oil prices, although weather forecasters were calling for yet another surge of cold air to sweep the Midwest and Northeast. Additional episodes of unseasonably cold conditions were also expected into April. But as far as the markets are concerned, and regardless of any transitory late-winter freezing blasts, spring is approaching and weather demand is predictably waning, not waxing.
Meanwhile, the global crude oil market remains flooded with inventory, although a return to balance is seen in the second half of this year in some quarters. OPEC secretary-general Abdalla El-Badri said consumption will increase by 1.2 MMbbl and high-cost producers will trim output amid lower prices. Slamming the door on any cartel move to cut production, El-Badri commented that if OPEC had reduced output at its November meeting it would have needed to make another cut in January, and then another since supply would keep surging from non-OPEC producers. Non-OPEC supply has grown by 6 MMbbld since 2008, while production by OPEC members has remained at about 30 MMbbld, he said. Analysts note the U.S. has too much oil and nowhere to put it, and overflowing storages could lead to another drop in prices.
Mont Belvieu non-LST spot propane mid-morning Thursday was trading at 54.125-54.75 cents/gal., down 3 cents for buyers and 2.75 cents for sellers compared to the Monday email Update. Low and high trades were posted at that same 54.125 and 54.75 cents. LST spots, at 54.25-54.75 cents/gal., were off 2.75 cents for buyers and 2.625 cents for sellers, with low and high deals done at 54.00 and 54.50 cents.
The Group 140 (Conway) bid and offer were at 50.125-50.50 cents/gal., lower by 2.25 cents for buyers and 3 cents for sellers from Monday. Low and high trades were reported at 49.625 and 50.50 cents.
Canadian spots have also moved lower, with Edmonton spots falling deeper into negative territory. At 15.00-20.00 cents/gal., the market shed 9.75 cents for buyers and 6 cents for sellers. Sarnia spots, at 75.00-76.00 cents/gal., gave up 2.25 cents for buyers and 1.5 cents for sellers.
Meanwhile, the global crude oil market remains flooded with inventory, although a return to balance is seen in the second half of this year in some quarters. OPEC secretary-general Abdalla El-Badri said consumption will increase by 1.2 MMbbl and high-cost producers will trim output amid lower prices. Slamming the door on any cartel move to cut production, El-Badri commented that if OPEC had reduced output at its November meeting it would have needed to make another cut in January, and then another since supply would keep surging from non-OPEC producers. Non-OPEC supply has grown by 6 MMbbld since 2008, while production by OPEC members has remained at about 30 MMbbld, he said. Analysts note the U.S. has too much oil and nowhere to put it, and overflowing storages could lead to another drop in prices.
Mont Belvieu non-LST spot propane mid-morning Thursday was trading at 54.125-54.75 cents/gal., down 3 cents for buyers and 2.75 cents for sellers compared to the Monday email Update. Low and high trades were posted at that same 54.125 and 54.75 cents. LST spots, at 54.25-54.75 cents/gal., were off 2.75 cents for buyers and 2.625 cents for sellers, with low and high deals done at 54.00 and 54.50 cents.
The Group 140 (Conway) bid and offer were at 50.125-50.50 cents/gal., lower by 2.25 cents for buyers and 3 cents for sellers from Monday. Low and high trades were reported at 49.625 and 50.50 cents.
Canadian spots have also moved lower, with Edmonton spots falling deeper into negative territory. At 15.00-20.00 cents/gal., the market shed 9.75 cents for buyers and 6 cents for sellers. Sarnia spots, at 75.00-76.00 cents/gal., gave up 2.25 cents for buyers and 1.5 cents for sellers.
