Weekly Mont Belvieu Propane-Butane price review September 22nd, 2023
Our assessment for last week's daily Mont Belvieu propane and butane in USD/mt (6.4% and 4.4% down respectively on the weekly average):
18th September: 395.1; 420.9
19th September: 387.0; 409.7
20th September: 369.9; 395.4
21st September: 368.1; 390.4
22nd September: 369.6; 386.8
In a surprising turn of events for the Oil & Gas sector, LPG prices have seen a glimmer of relief, despite the relentless bullish trend in oil prices. Butane and propane prices have both witnessed significant drops, with butane declining by 4.4% week-on-week, closing at 386.8 USD/MT, and propane prices plummeting by 6.4%, settling at 369.6 USD/MT compared to the previous week's 402.5 USD/MT.
However, it's essential to approach this apparent respite cautiously, considering the context of oil prices, which continue to reach new weekly highs. The recent decision by Russia to impose a temporary ban on fuel exports has sent shockwaves through the market. Europe, in particular, has witnessed a remarkable day-to-day surge of $45 per metric tonne in middle distillates, consequently boosting oil prices and counteracting the downward pressure caused by looming economic concerns.
Local LPG Prices in Nigeria: A Complex Landscape
In the Nigerian market, local LPG prices have reached historic highs in Apapa, with the industry witnessing a staggering new peak of 14.4 million Naira per 20MT by the end of the previous week. However, this surge appears to be accompanied by an underlying scarcity, potentially stemming from reduced imports driven by the high foreign exchange (FX) rate of the dollar, which has surged to nearly 1000 Naira. The FX rate's influence is a significant driver of current prices.
The outlook for the coming week is cautiously optimistic. With the drop in Mont Belvieu prices and the arrival of more vessels carrying LPG, we anticipate a gradual stabilization of prices, which should help alleviate the ongoing scarcity.
Retail Prices: An Impending Challenge
On the retail front, LPG prices in Nigeria have risen significantly, now reaching as high as 12,500 Naira per 12.5kg or 1000 Naira per kg. This surge in prices has the potential to hinder market growth, posing questions about the sustainability of LPG usage. Will consumers revert to less clean and more polluting fuels due to these high prices? This is a critical issue that we will continue to monitor closely.
In conclusion, the Oil & Gas market remains dynamic and influenced by many factors. Should you require further analysis or have specific questions regarding these developments, please do not hesitate to reach out. Our team is committed to providing the insights and guidance you need to navigate this ever-evolving landscape effectively.