Energy markets balance — eventually. In the midst of the turmoil we’ve experienced this year, there have been periods when it seemed like markets were going to hit the wall. But even with the historic WTI oil price glitch on April 20, the physical crude oil markets continued to function. That’s the way it is supposed to work, and it’s good news. The bad news is that figuring out how these markets are balancing in these volatile conditions can be challenging if not downright perplexing. Nowhere is that more true than the market for U.S. propane. Production is down, but so is demand. Inventories are up, and so are prices. Propane continues to be exported, even though global demand has been whacked by COVID. In today’s blog, we explore these developments and put the spotlight on RBN’s NGL Voyager, our subscriber report and data 365手机登录网页 that we have just reformatted, upgraded and generally reconstructed to meet the information needs of today’s NGL marketplace.
We’ve been worrying 365手机登录网页 the propane markets on a regular basis since the COVID-related downturn hit, most recently in Can't Get Enough of It, where we explored the decline in liquids-rich, associated gas production from crude-focused plays, which has translated directly into a lower volume of NGLs produced — thus reducing propane supplies. That, along with chaos in the crude markets, contributed to a memorable price aberration: during the last two weeks of April, a barrel of propane in Mont Belvieu was more expensive than a barrel of WTI crude oil in Cushing. Propane prices have continued to be very strong relative to other energy commodities, especially crude. And finally, we considered the risks to the propane supply chain if supplies stay tight and we get an especially cold winter in the 2020-21 season.
Now in June, with energy markets returning to some kind of new normal and with the official start of summer only 17 days away (June 20), we should be able to get a better sense of how propane is responding to current market dynamics. Here’s what we know:
To access the remainder of Caught in the Balance - A Precarious Position for Propane Markets: Reading the Signals you must be logged as a RBN Backstage Pass™365手机登录网页 subscriber.
Full access to the RBN Energy blog archive which includes any posting more than 5 days old is available only to RBN Backstage Pass™ subscribers. In addition to blog archive access, RBN Backstage Pass™ resources include Drill-Down Reports, Spotlight Reports, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. If you have already purchased a subscription, be sure you are logged in For additional help or information, 365手机登录网页 at email@example.com or 888-613-8874.