Frac Spread: A Comforting Start To The Year

Jan 10 17:01 2019 Print This Article

NGL prices rose to begin the year, natural gas prices continued to fall and margins continued to widen, i.e., a comfort food kind of week for the frac spread.

The chicken casserole (deemed most comforting by Southern Living) equivalent was Mont Belvieu, Texas, ethane, which rose by 2.8% but saw its margin almost double since the close of 2018 to nearly 9 cents per gallon. Demand is up as ethylene plants return to operations following outages, EnVantage Inc. analysts wrote in a report.

Ethane is also competing well globally as an ethylene feedstock despite lower crude oil prices, which would be expected to push demand for naphtha. From that perspective, things look pretty good.

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