Propane pricing will hinge on crude production
June 23, 2020 By Mark Rachal
Producers voluntarily shut production during April, and the associated natural gas liquids loss dramatically impacted propane fundamentals.
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Producers voluntarily shut production during April, and the associated natural gas liquids loss dramatically impacted propane fundamentals.
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Natural gas fundamentals are very important for propane retailers to monitor, since 80 percent of propane supply comes from natural gas processing.
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The United States saw a 5 percent increase in natural gas processing capacity and processing throughput between 2014 and 2017 in the lower 48 states.
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U.S. propane production surged at the end of 2018, which contributed to the recent weakness in propane prices and likely capped upside price potential.
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PADDs 2 and 1B were impacted by pipeline woes, while PADD 3 saw the planned expansion of Enterprise Products Partners’ Houston Ship Channel terminal.
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The U.S. Department of Energy published a natural gas liquids (NGL) primer, showcasing the resource potential of NGLs, specifically in the Appalachian region.
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Propane’s future in the new age of energy may not lie in typical markets.
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According to the U.S. Energy Information Administration, propane exports reached a record high of 913,000 barrels per day in the first half of 2017.
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Growing competition from less costly natural gas liquid (NGL) feedstocks has contributed to a decrease in global demand…
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The U.S. remained the world’s top producer of petroleum and natural gas hydrocarbons for the past five years, the Energy Information Administration reports.
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