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Ethane stocks, weak demand push NGL inventories to record high

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Ethane stocks, weak demand push NGL inventories to record high

Inventoriesof natural gas liquids surpassed a 10-month high in July with help from arecord level of ethane stocks. NGL inventories were also boosted by weakness indemand for propane and butane compared to a year ago.

Theaverage NGL barrel was priced at $18.49 on July 29 and compared to $19.89 onJune 30, according to data from S&P Global Market Intelligence.

Natural gas liquids

Inventoriesof NGLs rose 18.37 MMbbl in July from the previous month to reach a new recordhigh of 230.15 MMbbl, according to "Supply and Disposition" data fromthe U.S. Energy Information Administration published Sept. 30. The previousrecord was set 10 months earlier in September 2015 at 229.23 MMbbl. Theinventory level was 52.99 MMbbl above the five-year average.

Thesequential increase in stocks slowed from the 24.70 MMbbl gain reported inJune, with a gain in demand and lower production weighing on inventoriescompared to the prior month. Demand increased 188 Mbbl/d in July, whileproduction from natural gas plants fell 45 Mbbl/d.

Ethane

Inventoriesof ethane increased 1.38 MMbbl sequentially to a new record of 52.94 MMbbl inJuly. It was the third consecutive month of new records and likely the resultof decreased ethanerejection, as Btu levels in Northeast pipelines have recently declined. Ethaneinventories were up 22.21 MMbbl from the same month a year ago.

Thepace of the gain was slower than the 6.61 MMbbl increase reported in June, butinventories were still able to gain as production was high enough to satisfydemand.

Ethaneproduction from gas plants fell 84 Mbbl/d, to 1.30 MMbbl/d from the prior monthbut was up 211 Mbbl/d from the same month a year ago. Demand jumped 84 Mbbl/don the month and rose 110 Mbbl/d from the same month a year ago to reach 1.16MMbbl/d. Exports gained 10 Mbbl/d to reach 90 Mbbl/d but remained just shy ofthe record 94 Mbbl/d set in May.

Propane

Inventoriesof propane and propylene increased 5.42 MMbbl in July to 90.60 MMbbl. They weredown 405 Mbbl from the level in July 2015. The record was 104.55 MMbbl reachedin October 2015. The surplus to the five-year average declined to 23.68 MMbblcompared to 25.31 MMbbl in the previous month and a record 38.42 MMbbl set inNovember 2015.

Productionof propane from natural gas plants and refineries increased 6 Mbbl/d in July to1.75 MMbbl/d and held close to the record 1.776 MMbbl/d reached in May.

Demandfor propane increased 112 Mbbl/d from June, but was relatively weak compared toJuly 2015 with a decline of 103 Mbbl/d from that month.

Propaneexports increased 13 Mbbl/d to reach 755 Mbbl/d. The record of 894 Mbbl/d wasset in May.

Butane

Inventoriesof butane accounted for the largest share of the increase in NGL stocks, with again of 10.82 MMbbl reported in July from the previous month. The increasebrought inventories to 56.04 MMbbl, which was down 111 Mbbl from the same montha year ago.

Field-levelproduction increased 13 Mbbl/d to 324 Mbbl/d and held short of the record 351Mbbl/d set in April 2015.

Butaneexports fell 4 Mbbl/d, to 104 Mbbl/d, and remained short of the record high of148 Mbbl/d reached in May.

Inventoriesof isobutane fell 266 Mbbl sequentially to 8.62 MMbbl, while stocks of pentanesplus increased 1.02 MMbbl, to 21.95 MMbbl.

Market prices and includedindustry data are current as of the time of publication and are subject to change.For more detailed market data, including powerand naturalgas index prices, as well as forwardsand futures,visit our Commodities Pages.