There’s nothing like an incident to spark price movement. Thursday morning’s suspected attack near the entrance to the Persian Gulf have stoked, not only fears of a military confrontation between the U.S. and Iran, but also the oil price, up as high as 4.5% on early trades. This just seems a few hours after all the talk was about oil prices sinking 4% on the back of faltering demand.
Yesterday we explored the near-term developments that are more than likely to throw out new LPGs. These we can predict with a greater degree of certainty, than those further out in time. A lot can happen in the next five years, as a trader I’m always skeptical, more interested in months rather than years ahead.
So far this year there’s been a whole lot of hullabaloo over future U.S. LPG production growth. New fields, new pipelines, new fractionators, new export upgrades, may be even new terminals. You would think the rest of the world had gone napping! Judge for yourself, there seems a lot going on in various parts of the world, and it’s going to add more LPG to the international stage by 2025.
Nearly all contracts I’ve seen for LPG exports out of the U.S. Gulf are written as propane loadings, with a normal butane option, but only if declared by a certain date, and then limited to half the cargo. So, has butane been demoted to the role of “second-class” citizen in the relentless growth of U.S. LPG exports?
Whenever I go to a conference these days there’s always somebody talking about Propane Dehydrogenation (PDH). I think I might have already done the PDH blog last week! But back in my early days we all were talking about Autogas, LPG as a motor fuel. This was going to be the next big thing. So, I thought I might revisit it again, but maybe link it to what’s happening in Turkey.
Although my main interest is to show the macro side of our business in the SIMON SAYS BLOG, now and then I like to keep you appraised of what individual countries are doing. After seeing Brazil’s goalkeeper Allison, you just have to love Brazilian names, performing brilliantly in the dull European Champions League football Final in Madrid on Saturday (soccer to those across the pond), it had to be Brazil!