• 4 minutes Will We Ever See 100$+ OIL?
  • 8 minutes Iran downs US drone. No military response . . Just Destroy their economy. Can Senator Kerry be tried for aiding enemy ?
  • 11 minutes Energy Outlook for Renewables. Pie in the sky or real?
  • 11 hours Shale Oil will it self destruct?
  • 8 hours Berkeley becomes first U.S. city to ban natural gas in new homes
  • 27 mins Today in Energy
  • 2 days Excellent Choice: Germany's Von der Leyen Secures Powerful EU Executive Top Job
  • 12 hours Oil Rises After Iran Says It Seized Foreign Tanker In Gulf
  • 21 hours Populist, But Good: Elizabeth Warren Takes Aim at Private-Equity Funds
  • 22 hours Mnuchin Says No Change To U.S. Dollar Policy ‘As of Now’
  • 2 days Migration From Eastern Europe Raises German Population To Record High
  • 1 day Washington Post hit piece attacking oil, Christians and Trump
  • 2 days White House insider who predicted Iran False Flag, David Goldberg found dead in his New York apartment
  • 13 hours Why Natural Gas is Natural
  • 2 days Germany exits coal: A model for Asia?
  • 9 hours LA Solar Power/Storage Contract
Alt Text

This Supermajor Is Leading The Energy Sector

This supermajor has been standing…

Alt Text

How To Play A Recovery In Oil Prices?

A realistic correction in the…

Dave Forest

Dave Forest

Dave is Managing Geologist of the Pierce Points Daily E-Letter.

More Info

Premium Content

This Could Mean Surprise Profits for Natgas Producers

One of the less-recognized consequences of the U.S. shale gas boom has been a big jump in production of associated natural gas liquids (NGLs).

Leading to the question: what are producers going to do with all the stuff?

Production of NGLs like ethane is currently so high that prices have crashed. As recently as early 2012, ethane prices were about four times higher than natural gas--on a contained energy basis. Then production soared. To the point where today, formerly high-value ethane sells for almost the same price as natgas. A major price collapse.

But it appears there be some light for NGLs producers: in the form of exports.

The most recent data from the U.S. Energy Information Administration show that U.S. exports of another NGL--propane--are surging. Cheap prices prompted foreign buyers to take 60.3 million barrels of propane between January and July. Almost double the 40.52 million barrels America exported during the same period of 2012.

This lively export market is having a big impact on propane prices. Prices as a percentage of NYMEX Front Month crude oil reached 47% this week. A big jump from the 35% level propane hit this past summer.

In fact, propane prices are now just slightly below their 18-month high of 49% relative to crude.

That's great news for natural gas drillers who produce propane along with gas in plays like the Marcellus and the Eagle Ford. And the trend looks set to continue. U.S. midstream operators are pushing to increase propane export capacity, to tap high-value markets overseas.

If exports do continue to buoy propane prices, natural gas producers could see a surprise boost in profits--even at flat natural gas prices.

Here's to setting sail for new lands,

By. Dave Forest




Download The Free Oilprice App Today

Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play