LPG/NGL
General post re LPG/NGL market - curious to hear thoughts on current state of LPG/NGL market. This portion of light-ends spectrum has been strong in the face of overall weakness in market over the past 6 months. Would be interested in hearing thoughts regarding why this may be the case as usually related markets (gasoline, nap) have seen weakness not dissimilar to that of crude. How do we see this market faring over the next 6-12 months? Can suggest sources of information that are widely referenced in gleaning market color? Also, anyone familiar with LPG freight? Look forward to responses.
Relative strength could be chalked up to the fact that oil drillers in recent years have been getting gassier wells and weren't chasing nat gas products so when oil prices collapsed drillers stopped drilling and gas product prices held up due to lack of supply. Most drillers aren't out drilling specifically for gas yet hence no new supply in response to that. Also in the US we are seeing new export projects for ngls like propane started coming online over the year if I recall, unless they got shut down in the home stretch. Some asian folks supposedly were refining using lpg as feedstock back in May I believe, so we have another demand source.
What are some sources of information used to accurately assess supply/demand econs in LPG?
EIA straight inventory. More in depth analysis from groups like Bentek/Platts, Opis, etc.
Back in 2015 i interned on the LPG/NGL desk of a supermajor's trading department. And in the role i recently left for my current one, i traded derivs in that market.
What is the context of your question? Are you interested in entering the space? Or just generally curious? I ask because i can speak to this topic quite a bit and additional context would be useful in framing the conversation.
Appreciate the response - more out of curiosity. Interested in learning more about light-ends as a whole, and across that portion of the barrel, feels like LPG is the most opaque (relative to gasoline and naptha). That being said, given that product (LPG-based derivatives, think petchems, etc.) supply and demand economics allows value to stay firm/strong relative to supply/demand econs of base crude, or related gasoline, jet, fuel oil, am curious to hear how different stakeholders in the value-chain look gauge where value will be in the near-term, mid-term, long-term. Not sure if the scope of the question is too wide to adequately answer, but figured couldn't hurt to ask -
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