Propane tightens to historic highs amid crude oil doldrums
Propane prices at Mont Belvieu gained $0.25/bbl to close August 1 at $31.04/bbl (73.9 cpg) or 63% of WTI, even as WTI prices dropped by $1.01/bbl to close at $49.16/bbl. Prices increased again by 1.4 cpg to close at 75.3 cpg or 64% of WTI on August 2. This price action began in July with propane growing by about 11.6 cpg or 18% with July prices averaging 59% of WTI. This July average is the seasonal highest since 2011 (66%), when the US was transitioning from being a net LPG importer to becoming a net exporter. This strong relation to WTI could become the new normal as global demand growth re-links US propane prices to crude oil after several years of supply glut.