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NGL Commentary & Charts 11.22.21

By: Peter Rowley, Risk Manager - Energy

 
NGL Market Brief : 11/22/21
 
Peter Rowley
Risk Manager- Energy (prowley2 ICE)

Dec21 Mt Bel LST Propane futs were lower 4/5 days last week with losses totaling 18.375cpg or 14.4% and marking the worst week for headline LST futs since March 2020. On the technical front we have LST prices have been collapsing through both the 50d and 100d Moving Averages and are now just below 3cpg above the 200d while from the 14-day Relative Strength Perspective headline futs have officially dipped into oversold territory.

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Even with C3 LST futs slipping nearly 3cpg or 2.63% on Friday the steeper losses in WTI helped push propane’s relative value back above 60% but have cratered from reaching highs of 82.5% at the beginning of October. Conway propane fared worse to end the week as Dec21 shed 3.375cpg or 3% and are now trading at parity with both Jan22 and Feb22 futs. However, on the week, both Midwest and USGC propane futs shed the same 18.375cpg keeping near term N/S basis stable WoW.

During the week Dec21 basis rallied to as much as a 1.25cpg Conway premium for the first time in two weeks but is still 1.50cpg lower from the past 3 months. Next winter basis saw modest losses for the week as the Q421-Q122 slipped .625cpg at ~3cpg and is nearly 2cpg lower from its yearly highs at the end of September.

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 Even with the collapse in the front end of the of the c3 LST curve the Q122/Q222 held steady on Friday and saw a modest uptick and added .25cpg to a backwardation of 12.25cpg. The destruction in that part of the curve continues to be where the air is coming the most out of the balloon as the quarterly  spread shed 5.75cpg on the week and are ~17cpg lower from its peak in the first week of October.

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CFTC CoT data showed a marginal uptick in overall Mt Bel LST Open Interest on CME but are still 5.6k lots or 4.2% lower YoY. This week saw Commercial traders increase their short position by nearly 4k lots and pushing the net position to the lowest since mid-February.  The net long/short hedge fund position also dipped to just a monthly low as funds closed out their open long bets by 11% WoW.

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