The north-south spread reversed yesterday as Conway prices climbed yet higher, gaining 1.9% or 1.63 cents and reaching 88.63c/g. Meanwhile, Mt. Belvieu TET prices fell back 3.6% (3.13 cents) to 84.88c/g - a 3.75-cent discount to Conway. Conway prices moved in the same direction as crude futures yesterday, and gains were similarly-sized with Brent up 2.0% and WTI gaining 2.3% amid gains in global shares - despite strength in the US dollar. Natural gas futures were little changed yesterday, down 0.2%.
Crude futures were strengthening this morning along with equities and with bullish API crude stock data, although data from the EIA were neutral to unsupportive. As of this writing, WTI futures had gained 2.7% and Brent futures were trading 2.3% stronger. Natural gas futures were falling further, down 1.5%. Propane prices were falling, but the north-south spread remained reversed ahead of the weekly EIA inventory report. Mt. Belvieu TET prices were down 2.8% (2.38 cents) at 82.50c/g (non-TET at 81.00c/g) and Conway prices were 2.4% (2.13 cents) weaker at 86.50c/g.
EIA inventories for the week ended January 29 were unsupportive for propane. Analysts surveyed by OPIS were looking for a 2.91mb draw to be reported, but EIA showed a 1.56mb dip instead. A 6.2% dip in implied demand, which averaged 1.49mb/d last week, helped to limit the size of the draw. Imports rose marginally, averaging 0.15mb/d, and production rose slightly to 2.41mb/d, also helping keep the pressure off of inventories. On the other hand, exports picked up by 2.7% to just under 1.3mb/d. Gulf Coast stocks fell by 0.57 to 30.52mb and are now 17.5% below their five-year average. Midwestern inventories, following a 0.77mb draw, are 8.4% below their five-year average. East Coast stocks shed just 0.06mb last week, falling to 6.87mb - still 34.8% above their five-year average. National inventories are 6.5% below the five-year average and 28% below last year's levels, amid strong exports this winter.
