U. s. ngl prices recovering faster than crude, report finds _ 2016-03-11 _ natural gas intelligence

Despite the warmest winter on record, U.S. Gas z factor natural gas liquids (NGL) prices are recovering faster than crude oil, thanks in large part to strong growth in propane and butane exports and slowing domestic shale gas production, according to report by BofA Merrill Lynch Global Research.

In its report, “The American Propane Armada,” released Thursday, BofA analysts said that since mid-January, domestic propane prices have rebounded 62%, from 29 to 47 cents/gal. Gas zauberberg 1 By comparison, during the same time frame butane and natural gasoline prices have increased 33% and 26%, respectively. Electricity usage calculator kwh But when NGL prices are weighted as a percentage of West Texas Intermediate (WTI) crude, the ratio surged over the last nine months.

“True, the rebound in the second half of 2015 was driven mainly by the sharp decline in crude prices compared with U.S. Ag gaston birmingham 120 natural gas — and therefore ethane too,” the BofA analysts said. Gas vs electric water heater “Yet since the beginning of the year, the intrinsic improvement has been driven by tighter NGL fundamentals, especially on the demand side, as U.S. Electricity quiz and answers NGL as sendouts have grown relentlessly on a drastic expansion of U.S. K electric share price export capacity.”

BofA said that over the past 18 months, demand for NGLs in Asia — especially China, Singapore and South Korea — has increased substantially. Hp gas NGL exports from the United States averaged 970,000 b/d in 2015, a 38% increase (270,000 b/d) from 2014. Gas refrigerator not cooling Propane accounted for a large part of the increase, with 2015 exports up 190,000 b/d (46%) from the year prior.

“This exports boom has been made possible due to a combination of low NGL prices compared to the international market and a drastic expansion of U.S. Gas 87 liquefied petroleum gas (LPG) export capacity,” the BofA analysts said, citing in part the recent expansion of Enterprise Products Partners LP’s export terminal capacity last December by 230,000 b/d, to 650,000 b/d (see Daily GPI, Oct. Gas x ultra strength directions 30, 2015). M gasbuddy app With two additional export terminals scheduled to come online within the next nine months, BofA projects total export capacity will increase from the current capacity of 830,000 b/d to 1.3 million b/d by the end of 2016.

The report found that low persistently commodity prices and the subsequent decline in the rig count was causing U.S. Wb state electricity board recruitment 2015 production of heavy NGLs to level off. R gasquet tennis Last December, total U.S. Gasco abu dhabi email address NGL output declined on a monthly basis, and November’s figures were largely unchanged from October.

“When excluding ethane…U.S. Origin electricity account NGL production growth recently faded drastically, which tightened the Canadian diluent market. Electricity allergy In December, pentane production fell year/year [y/y] for the first time since February 2011,” the report said. D cypha electricity It added that NGL production, excluding ethane, in PADD 3 “is now decreasing y/y, driven by sharp declines from the Eagle Ford Shale.

“With the EIA [Energy Information Administration] now forecasting crude production to drop by 760,000 b/d this year and by an additional 480,000 b/d in 2017, further and sharper NGLs declines look to be on their way.”

But BofA said ethane was another story, since ethane production often derives from shale gas, its production is dictated by takeaway capacity expansions and it also fluctuates with ethane rejection.

“As U.S. Gas explosion natural gas production has been more resilient than oil, it is no surprise that ethane production continues to grow y/y…any unwinding ethane rejections may potentially offset underlying raw production declines,” the report said, adding that ethane production growth in PADD 1 (East Coast) and PADD 2 (Midwest) “has been mainly driven by rejections.”

Propane stocks have fallen more than what was expected during the winter season, BofA said, due to a combination of higher demand for propane exports and declining production. Electricity electricity song The report found propane inventories deviated from the five-year maximum by falling from 27 million bbl in mid-November to 10 million bbl today.

“We do not think [propane] stocks will go back to the five-year average by the end of 2016, as they currently stand 24 million bbl, or more than 62%, above it,” the report said. Gas water heater reviews 2013 “The rest of the complex is closer to rebalancing as inventories currently stand only 25% above the five-year average.”

BofA said it had a guarded outlook for the future of butane, but saw propane continuing to strengthen. E gasoline Although propane withdrawals were higher than expected, stocks remained above the five-year maximum for this time of year. Electricity balloon experiment The forecast for warmer weather was also expected to drive down domestic demand until May.

“These two factors, combined with export growth to China potentially fading, could weaken U.S. Electricity calculator propane fundamentals in the coming months,” BofA said. Gas 91 “Yet the fact that U.S. Electricity magnetism and electromagnetic theory pdf propane stocks have fallen on reduced supplies and surging demand implies a tighter propane market as we head into next winter…

“We retain, however a more bearish view on butane, as U.S. Grade 9 electricity test and answers refiners enter their maintenance season, and start to shift from winter to summer gasoline production, implying less blending demand for butane seasonally.”

BofA said that if crude oil prices rise to $47/bbl by mid-2016, butane and propane prices will also increase. E 87 gasoline The report added that ethane prices should remain tied to U.S. Power outage houston report natural gas prices, at least until new ethane crackers come online in 2017. 3 gas laws Those projects are likely to include an agreement by Ineos to use ethane from U.S. 76 gas station hours shale gas to supply a plant in Scotland (see Shale Daily, Nov. K gas oroville 10, 2015), and plans by Indorama Ventures to renovate and restart a dormant ethane cracker near Lake Charles, LA (see Daily GPI, Sept. Gas efficient suv 2010 24, 2015). Gas city indiana post office Additional capacity expansions in Texas are scheduled to come online around 2017 (see Daily GPI, March 31, 2015).

“LNG could act as a true cap on liquids prices next winter on extensive switching capacity,” BofA said. E gaskell north and south “But the fact is U.S. Electricity video ks1 propane stocks have fallen on reduced supplies and surging demand. Wireless electricity how it works The curve is now in backwardation. Zyklon b gas effects The first bull market in the petroleum complex has emerged.”

According to EIA, the Mont Belvieu, TX, spot price for propane has been climbing for at least the last six consecutive weeks, from 33 cents/gal on Jan. Electricity history united states 29 to 43.3 cents/gal on March 4. Electricity 1 7 pdf EIA said propane closed at 47 cents/gal on Thursday.

The National Oceanic and Atmospheric Administration (NOAA) reported earlier this month that the El Nino in place since November is dissipating, and on Tuesday announced that the period from December 2015 through February 2016 was the warmest winter on record (see Daily GPI, March 2).