Propane prices rallied on Monday, showing independent strength as gains outpaced those in NYMEX natural gas futures and as crude futures lost ground. Brent crude fell 1.4% yesterday, and WTI crude dropped 1.9% while OPEC+ debated output policy for next month and amid weakness in US equities. Meanwhile, Mt. Belvieu TET propane prices jumped 4.1% (3.13 cents) higher to 78.63c/g and Conway spot prices shot up 4.7% (3.37 cents) to 75.25c/g. Platts sources indicate strong netbacks to the Asian market and solid global propane demand.
Propane Spot Prices Spread Conway Mt. Belviue
Crude futures were rallying this morning as OPEC+ deliberations continued, with Reuters sources indicating the group was leaning towards rolling the current output ceiling into February. Also supportive were losses in the US dollar index, as well as modest strength in US shares, despite flat to lower trade in European equities. As of this writing, WTI futures had rallied 4.4% and Brent crude futures had climbed 3.7% higher. Natural gas futures were also seeing strength this morning, up 5.4%. Propane prices were moving in the same direction as crude futures today, but gains were slimmer. Mt. Belvieu TET anys were up 1.0% (81 points) at 79.44c/g this morning (non-TET at 79.00c/g), and Conway spots had added 0.8% (63 points) to reach 75.88c/g. In the news, Argus reports that growing LPG demand from the Chinese petrochemical sector looks set to help offset the effect of the coronavirus pandemic on Chinese LPG imports this year. Imports for the petrochemical sector are expected to jump 22% or 4.4 million metric tons this year as new projects come online.
US Propane Stocks
