It’s been more than a week since the fire went out in Mont Belvieu. We spent the days reading the headlines, watching to see how the big propane hub would react. Spot prices ended the past week down, and judging by the latest retail prices, dealers weren’t jittery about the supply. Our takeaway from this? The propane was flowing on.
But the trading started to get wonky this week. Hub prices went up more than three pennies on Valentine’s Day, another cent on Tuesday, then two more on Wednesday — a five-percent increase in three days, with prices nudging higher today. Four days straight is a trend, and prices at the hub have now hit new highs for the heating season. By contrast, Conway spot prices are hovering more than 10-percent lower.
What to make of the tardy upturn? The owner of the storage facility where the blaze began, Enterprise Products, has declined to identify which natural gas liquids (NGLs) were affected by the disruption. That may have left traders speculating, though other NGLs didn’t wait to react. Butane bumped up about a dime and hasn’t looked back, while ethane eked out some gains. Though before we get too antsy, consider this bit of Mont Belvieu chatter: Tonight, Enterprise reportedly plans to re-open two gas fractionators that have been shut since last week’s blowout. So production should be back on track tomorrow.
Still, why the lag? If a propane tank falls over in the forest, does it take a week to make a sound?