The beauty of the U.S. NGL market is that it’s full of statistics, in fact, America does statistics very well, just take a look at American sports and you’ll see why. With so many numbers to digest in the NGL world, it tends to draw our attention to the U.S. more often than not, maybe too much. Not surprisingly it does influence what I see and think, and I’m starting to believe the U.S. has taken over as the driving force of the whole international market.
In yesterday’s SIMON SAYS we started to explore the Saudi Aramco Contract Price (CP) and asked the question “how do parties really make money from CP related contracts out of the Middle East?” We went a little way down memory lane, but what seemed to be the answer, maybe not the only answer, lay in the end year activities, both calendar and fiscal, of the Japanese LPG importers and the value of the product they hold in storage.
I’ve been in this business for a very long time now and it probably makes me start taking things for granted – that’s certainly been the case for the Saudi Aramco Contract Pricing (CP) and its influence on Middle East suppliers and their homes in the East. So, will we see a fundamental change in the way LPG is priced in the Middle East, and if so, when? How many times has that question been asked?
In yesterday’s SIMON SAYS I started to explain, I hope as simply as possible, enough about how the ARB works so that you can all go out today and put the trade on, well at least understand why others are. For me it is a pricing relationship that will increasingly dominate the international trading world as more and more LPG is exported from the U.S. in the coming years. If exports do reach 40 million Mt this year, then the U.S. will be a hair’s breadth away from also taking over as the world’s leading export region.