Warm Weather Slows Demand

Although tumbling oil prices have led to drastic job cuts across the North Sea oil and gas industry, many fields are coming to the end of their lives after running since the late 1970s. However, investor confidence has just been boosted by a jump in the Brent oil price to above $41 (U.S.) a barrel, the first time it has hit that mark this year.

The large propane and butane markets in Northwest Europe have been lackluster, primarily because of the prevailing mild weather causing a decrease in demand. Prices for large, fully refrigerated cargoes of propane and butane are at $282 per tonne cif Amsterdam/Rotterdam/Antwerp (ARA).

The coaster markets have been more active, with only the petrochemical manufacturers being well-covered. The latest indication of propane swap deals are May $282-$287 per tonne cif Northwest Europe and June $283-$287 per tonne. North Sea prices for April are at $252.50 per tonne fob North Sea terminals for propane and at $239 per tonne fob North Sea terminals for butane.

In the Mediterranean, the large propane and butane markets have been quiet, with tight supplies offset by slow spot demand. Large, fully refrigerated cargoes of propane now stand at $379 per tonne cif Lavera, South of France, for propane and at $370 per tonne cif Lavera for butane.

Sonatrach of Algeria has posted new contract LPG prices for April of $260 per tonne fob Skikda and Bethouia for propane and at $295 per tonne fob Bethouia for butane. Saudi Aramco has set new LPG contract prices for April at $320 per tonne fob Middle Eastern (M.E.) terminals for propane and at $350 per tonne for butane. Spot discounts against contract prices currently stand at minus $1 per tonne to $1 per tonne for both grades of LPG. In the Far East
there has been little trading activity of late, with only a few deals completed.

Some examples of large shipping fixtures include the 22,000-cu-meter-capacity Navigator Ceto, which was chartered by CNR (Calgary) to load 12,000 tonnes of LPG from Houston for delivery to the east coast of Mexico. The Gas
Oriental, 35,000 cu meter capacity, was fixed by Reliance (Mumbai) to load a full cargo from India to another location in India. The Aurora Capricorn, 82,000 cu meter capacity, was taken by Shell (The Hague, Netherlands) to load 46,000 tonnes of LPG from the M.E.G. for destination east options. The B.W. Kyoto, 83,000 cu meter capacity, was chartered by Vitol (Rotterdam) to load 46,000 tonnes of LPG from the U.S. Gulf for delivery options. The Concorde, 84,000 cu meter capacity, was fixed by SK Gas (Seoul) to load 46,000 tonnes of LPG from the U.S. Gulf for delivery options. The VLGC market has been quiet, causing freight rates to remain in the doldrums.