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NGL Commentary & Charts 11.12.21

By: Peter Rowley, Risk Manager - Energy

 
NGL Market Brief : 11/12/21
 
Peter Rowley
Risk Manager- Energy (prowley2 ICE)
Morning NGL Quick Notes:
  • Dec21 LST Propane futs settled at least 5cpg lower for a second straight session as the rug continues to be pulled out of from under us. The opening range saw a range of $1.36125-1.355/gal, losses of 2-2.625cpg before the elevator drop at mid-day which took headline prices down to $1.3275/gal on the close. Dec21 futs settled .375cpg off those lows but settled 5cpg or 3.62% lower on the day.  
  • Dec21 Conway fared slightly better than USGC prices but still shed 4.875cpg or 3.47% and are now 5cpg lower for the week. Both Conway and MTB LST futs are on pace for a fourth consecutive week of losses, marking the longest losing streak since March 2020 for LST. Yesterday’s MTB settles took C3 LST to $56.23/bbl and are now at 69% of WTI, the weakest in two weeks and a value level we had not meaningfully been through since early August.

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  • Headline MTB LST propane futs broke below its 50day Moving Average for the first time since mid-May which was the beginning of the uptrend that took prices as much as 85.5% or 70cpg higher. The breakthrough below the technical indicator could be viewed as a potentially bearish with downside support flagged at the 100d MA at $1.23875/gal.

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  • I am flagging the Q122/Q222 for MTB LST again this morning as the backwardation for the back half of winter continues to see it’s risk premium come out of the balloon.  Yesterday saw the quarterly spread shed 1.875cpg to 20.50cpg, the weakest settlement in two months. Despite now being 8.50cpg lower from its early October peak of 29.00cpg the spread is still 12.25cpg higher than the 5-year seasonal average.

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  • US Propane Exports hit the highest since mid-April last week at 1.58MM b/d but this week’s loadings are looking to dip at least 280k b/d as heavy stockpiling and Panama Canal congestion is putting a damper on further upside. As BNEF data noted, US LPG exports averaged 2MM b/d last week, the second highest weekly average since 2014. After peaking at just under 3.5MM b/d in September, October Global LPG imports fell 225k b/d from that record according to Vortexa but with this dip in prompt prices I would expect US exports to rebound in the near term if this week sees a decline in loadings.
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  • Energy

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