Compliments of the season
Our assessment for last week's daily Mont Belvieu propane and butane in USD/mt (12.1% and 6.3% down respectively on the weekly average):
5th December: 357.0; 432.0
6th December: 346.5; 418.5
7th December: 347.8; 403.7
8th December: 342.1; 392.6
9th December: 346.5; 392.6
LPG Butane prices closed significantly lower by 12%, closing at 392 USD/MT against the previous week's close of 440 USD/MT ( lowest since April 27th, 2021). Propane prices this time had a lower change in closing price (6%); closing at 346.5 USD/MT against the previous week's close of 368 USD/MT.
Factors affecting price drop include primarily, the dropping crude oil prices, lower demand from China from the COVID-19 Lockdown, and recent improved economic numbers from the US. Factors that could lead to a reversal of price trend are; Limited availability of oil and gas in Europe as a result of restricted supplies from Russia and supply gaps, increased oil and gas demand from the winter temperature, and cut in oil production among OPEC members when they meet in December. The OPEC + (PLUS) met early last week and decided not to cut supplies; according to Reuters; OPEC+ agreed to stick to its oil output targets at a meeting on Sunday as the oil markets struggle to assess the impact of a slowing Chinese economy on demand and a G7 price cap on Russian oil on supply - this is a relief to the market.
Local LPG prices in Nigeria
On the local side, prices fell slightly and peaked at 12.4 Million Naira per 20MT at NAVGAS depot (Apapa) and dropped later to 12.3 Million, with most depots selling between 12.05 to 12.2 Million Naira per 20MT. Prices could go higher as the market is experiencing some scarcity, except for that, prices should drop as LPG arrives at the depots at a lower landing cost.
LPG retail prices at the LPG plants should remain within the same prevailing levels; between N9,000.00 to 10,000.00 nationwide.