Podcast by

Kathy Hall
Executive Director, PetroChem Wire by OPIS

Luka Powell
Financial & Capital Markets
Luka Powell (00:19):

Welcome to the Olefins Weekly Wrap Ip. Today is Friday, November 10th, and I’m your host Luka Powell.

Kathy Hall (00:26):

And I’m Kathy Hall.

Luka Powell (00:29):

And together as Chemical Market Analytics, we recap the top events moving the ethylene and propylene markets over the past week. The design of this podcast is to complement the content from the North America Light Olefins Weekly service, otherwise known as the NALO Weekly. Welcome back to the podcast, Kathy! Long time no speak, what’s new since we last spoke?

Kathy Hall (00:53):

Well in the States, we recently had our Daylight Savings event and our clocks moved back by one hour. This puts us more in sync with some countries and more out of sync with others, which sounds like I could be describing the US markets! Prices have also generally rolled back to lower levels, but that of course changes our position against other global regions on a relative basis. So what’s the story in energy Luka?

Luka Powell (01:23):

Well, on the 9th of November, WTI front month futures closed at $75.74 per barrel, falling 8.1% respectively from last week, which is a three-and-a-half month flow. Currently, the focus is on OPEC+ as they consider the option of prolonging voluntary cuts into 2024 to address the market outlook. The market is now very eagerly anticipating the results of the meeting on November 26th, especially given the confirmation by both Saudi Arabia and Russia regarding production and export reduction until the end of this year. Over to Natural Gas on November 9th, Henry Hub front month prices concluded at $3.04 per MMBtu, a decrease of over 12% since last Thursday. The weather forecast suggests a reduction in anticipated heating demand due to slightly higher temperatures over the next few weeks, which may lead to an uptick in injections and to gas storage. Meanwhile, as of November 8th, underground storage facilities in Europe were 99.5% full, and the December TTF facility price dropped to $13.31 per MMBtu on November 9th.

Kathy Hall (02:40):

So how have NGLs reacted to the energy trends? Well, they continue to largely follow it. Propane prices at Mont Bellevue moved from 64.5 cents per gallon last Friday to about 62.5 cents by Thursday afternoon. Ethane prices also eased moving from 26 cents per gallon last Friday to nearly 23 cents by Thursday afternoon. But how did this compare with ethylene?

Luka Powell (03:09):

Well, deals in the US spot market this week totaled 108 million pounds completed at the Texas and Louisiana hubs. Ethylene prices on a simple average basis, decreased settling between 16.5 to 20.75 cents per pound for November delivery. Ethylene supply in the USGC is expected to improve this month as most of the current planned and unplanned maintenance outages that have constrained outputs since September wrapped up. After being well below 80% in October, operating rates are expected to recover to the low-eighties in November and rise to the mid-eighties in December. However, a new round of maintenance turnarounds are expected in the first quarter of 2024. Inventories had fallen significantly from their peak in August, but remain at healthy levels and spot prices continue to decline this week alongside feedstock prices. You can see the NALO for more information.

Kathy Hall (04:07):

Well, thank you. Over in polymer-grade propylene, supply concerns appear to have ratcheted up the appetite for November spot material as prices rose from slightly above 46 cents per pound at the start of this month to reach 49.5 cents by Wednesday. The front month market closed at a slightly lower price of 48.5 Cents this Thursday, but the relatively steep backwardation seen in the PGP forward curve indicates that the front month still holds the strength. The November-December spread was at 4 1⁄4 cents backward, meaning that the premium is on November, and first quarter PGP was a penny under December. In the meanwhile, be sure to check out the latest ethylene and propylene analysis in the weekly NALO reports.

Luka Powell (05:01):

And with that, let’s wrap up the Wrap Up. Don’t forget to subscribe to our podcast on SoundCloud, Spotify, Apple, or Google Podcasts or wherever you get your podcasts, and give us a like or leave a review if you enjoy it. If you have any questions or if you’d like us to cover something more specific, you can send us an email. Until next time.

Save the date for next year’s World Chemical Forum on September 9-11, 2024 in Houston!