LPG Report: Uncertainty is the Only Certainty?

Summary

The Jun’25 Mont Belvieu TET propane (Energy Transfer) contract, C3 LST, initially climbed this fortnight amid support in LST spreads and buy-side interest in the C3 LST/FEI arb. However, price action has since been stagnant, declining from 79.50c/gal on 14 May to 76.625c/gal at the time of writing on 21 May. This past week, trade houses sold around 55kb of the contract against Onyx, while majors, banks, and end users bought 120kb of the contract.

21 May’s EIA data, for the week ending 16 May, recorded a 2.6mb build in US propane inventories, 2.2mb of which was concentrated in the US Gulf Coast (PADD-3). Meanwhile, US propane exports declined from 2.2mb/d (near US export capacity) in the week ending 9 May to 1.69mb/d the following week.