Crude drilling slowdown could support propane prices
July 30, 2018 By Mark Rachal and Dale Delay
Last week, U.S. crude production hit 11 million barrels per day for the first time ever.
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Last week, U.S. crude production hit 11 million barrels per day for the first time ever.
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Over the last year, propane has been pulled higher by rising crude prices since propane’s relative value is not keeping up with the rise in crude’s price.
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Propane’s relative value to West Texas Intermediate crude is already slightly below the low end of the range we expected for this summer.
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Cost Management Solutions’ Mark Rachal takes a look at propane’s relative value to crude and how it is trending compared with last year.
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U.S. propane prices have returned to where they began the winter – in a price decline that has surprised many, given strong domestic demand support.
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Energy consultant and researcher Anne Keller wields her “crystal ball” for NGL forecasting.
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Propane supply gets less attention than demand, but is more important in setting the pricing environment.
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Major producers, including OPEC countries and Russia, agreed to extend the production quotas implemented in January through the end of 2018.
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Propane prices often go through a bit of a slump between the middle of October and the Thanksgiving holiday.
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Relative to West Texas Intermediate’s crude price, Mont Belvieu is valued at 76 percent, while Conway is valued at 73 percent.
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