Weekly Mont Belvieu Propane-Butane Price Review December 8th 2023

By Godwin Okoduwa ــ Last Update 10 December 2023

Weekly Mont Belvieu Propane-Butane price review December December 8th 2023

Our assessment for last week's daily Mont Belvieu propane and butane in USD/mt (5.3% and 13.9% up respectively on the weekly average):

4th December: 381; 471.8

5th December; 372.4, 459.2

6th December; 355.9 ; 454.4

7th December: 361.8; 492.6

8th December; 367.6; 500.6

Unexpected significant increase in LPG prices, expecially for butane with a massive 13.9% average increase against the preceding week; crossing the 500 USD mark for the first time since March 2023. The reason for this increase seems to be as a result of the Winter season. Last year the Butane prices closed at 473.8 USD/MT; for this year it seems to be a different story, and surprisingly too as oil prices struggle below 80 USD per barrel following low demand in China, weak global economy, increased supplies from the USA and huge additional supply prospect from Guyana.

Oil Prices and Market Dynamics:

Oil prices seem to be struggling despite the continued voluntary production cuts from OPEC+ countries. Although, new addition like Brazil doesnt seem to be interested in supply cuts. The tension in the middle east is also down at the moment but has a strong potential to send prices back up. Lower demand from China and Asia is also a big factor for Oil prices. At the moment, lower oil prices demand doesnt not seem to have any effect on Gas demand as the winter comes which has led to higher gas prices.

Nigeria LPG Depots:

In Nigeria, LPG depot prices have dipped significantly to 15.4 Million per 20MT in Apapa, breaching the 16 million mark last week, for the first time in almost two (2) months. The decrease in prices is certainly not from international prices which went up last week nor as a result of lower FX rates, but could be linked to the new directive on Import duty and VAT waiver on LPG which was confirmed by the Special Adviser to the President on Gas; which easily reduces the landing cost of LPG by 12.5%. However, we shall be keeping our eyes on international prices and the Exchange rates which can shoot prices back up.

LPG Retail Prices:

We expect a significant decrease in retail prices nationwide and shall be communicating in due course.

Please feel free to reach out if you have any questions or require a more in-depth analysis of these market developments. Our team is committed to providing the insights and guidance necessary for effectively navigating this dynamic market.