Mt. Belvieu TET propane prices reclaimed their typical premium over Conway barrels yesterday, as Mt. Belvieu TET prices climbed 3.0% (2.50 cents) higher to 86.13c/g, while Conway prices dropped 3.0% (2.63 cents) lower to 85.75c/g. Meanwhile, crude futures were little changed and mixed as Brent settled just 2 cents north of the unchanged mark, while WTI futures shed 0.3%. Natural gas futures lost 1.9% yesterday.
Crude futures were losing ground along with global shares this morning following disappointing Japanese, UK, and Eurozone economic data, although data from Canada and the US were more encouraging. WTI futures were down 0.8% and Brent crude futures had lost 0.9% ahead of the release of the weekly EIA inventory report. Ahead of the report, propane prices were extending their sell-off. Mt. Belvieu TET prices had dropped 4.4% (3.81 cents) lower to 82.31c/g (non-TET at 81.00c/g) and Conway prices had fallen 4.7% (4.06 cents) to 81.69c/g.
The weekly petroleum inventory report released by the EIA this morning was bullish for propane. Analysts surveyed by both Clarksons and OPIS saw a 3.8mb draw, but the agency reported a sharper drop of 6.23mb for the week ended January 15. The 9.4% drop was helped along by yet another increase in net exports, of 9%. Exports picked up 9.9% (133kb/d) to average 1.48mb/d - well above last year's 1.22mb/d during the same week. Also putting pressure on inventories was a 1.9% drop in production, which averaged 2.30mb/d. On the other hand, implied demand fell 10.7% (225kb/d) to average 1.88mb/d last week - still well above last year's 1.49mb/d. The Gulf Coast saw 3.04mb of last week's draw, with stock levels falling to 31.92mb and a 21.7% deficit to their weekly five-year average. Midwestern inventories fell by 1.94mb to 16.72mb and are 7.9% below their five-year average. East Coast stocks also fell, by 1.18mb to 6.33mb, but are still 16.1% higher than their historical average. Overall US stocks continue to fall rapidly and are now 10.6% below their five-year average and 25.8% below last year's strong levels, amid the rapid rate of exports. So far, differentials at the Selkirk, NY rack have not strengthened too much, averaging 34.6 cents over the past seven sessions.