Spot Propane Ends Week Still Higher, Crude Slumps

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Spot propane climbed still higher Thursday to hold on to the gains seen over the previous week. Midwest spots rose another 1.125 cents to post a gain of 3.75 cents in a week’s time, while Texas trading climbed 3.5 cents over the period. Meanwhile, the spread between Mont Belvieu and Conway, Kan. has drawn to a narrow 2 to 3 cents. The late-week commodity price strengthening came despite crude oil futures dropping to their lowest settlement since late October, well below $46/bbl. Further, the Energy Information Administration (EIA) reported Nov. 4 that U.S. propane demand was nearly 200,000 bbld lower the week ended Oct. 30 compared to a week earlier. Demand was down about 400,000 bbld for the year. Finally, EIA tallied a 0.8-MMbbl build for propane the last week of October, which shifted primary inventories up to 102.4 MMbbl, 22.3 MMbbl above last year. No build was expected.

Mont Belvieu non-LST mid-morning Thursday was trading at 44.625-45.00 cents/gal., up a half cent for buyers and a quarter cent for sellers compared to the Monday email Update. Low and high deals were reported at 44.75 and 44.875 cents. LST spots, at 45.125-45.50 cents/gal., were a quarter cent higher for buyers and sellers. Low and high trades in that market were posted at 45.25 and 45.875 cents.

The Group 140 (Conway) bid and offer were at 42.125-42.375 cents/gal. for gains of 1.125 cents for buyers and 0.625 cents for sellers. Low and high deals were on the board as of mid-morning at 41.75 and 42.25 cents.

In a sign heating demand may soon be kicking in, weather forecasters Thursday were calling for rain to help usher in cooler air in the Midwest and Northeast, sweeping away a warm start to November. A cold front was reported to be moving from the Midwest, causing temperatures to drop 10 to 20 degrees. Another storm front was poised to roll into the West, accompanied by rain and snow the second week of November. Elsewhere, December West Texas Intermediate (WTI) crude oil futures fell 55 cents, or 1.1%, to trade at $45.79/bbl Thursday. Brent crude declined 24 cents, or 0.5%, to $48.34/bbl. Conversely, natural gas futures climbed, adding 7.1 cents to rise to $2.333/MMBtu. Analysts noted that natural gas bucked the overall downtrend in energy commodity prices.

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