Prices soared this month. It is the second highest price increasing range in the last three years, and hit the highest since July 2014. Propane increased by $ 425 and butane increased by $ 415 year-on-year to 213.3% and 209.2%, respectively.
As for the crude oil market, 43.6% of oil production stopped as of the 13th due to the influence of the hurricane “Aida”, which hit in the southern part of the US at the end of August, and a price index NYMEX WTI rose. The impact of the hurricane has been prolonged, and as of 23rd, more than 16% of oil production still stopped, and in addition to the possibility that it will take several months to fully recover, crude oil and petroleum product inventories will decrease, boosting market conditions. In addition, equipment malfunctions occurred in some OPEC Plus countries, and capital investment and maintenance work were delayed due to the corona disaster and it was difficult to increase production. On the other hand, corona-related restrictions were eased in some parts of the world, and expectation that demand for crude oil will increase has pushed up market conditions. Goldman Sachs raised its Brent crude oil visibility at the end of the year by $ 10 to $ 90. Factors pushing down market conditions include the Chinese government releasing strategic stockpiles of crude oil to curb the rise in energy prices, the EIA weekly report showing that crude oil inventories have fallen below market expectations, and OPEC’s forecast that demand for petroleum products will be decreased through October to December due to spread of corona infection.
The CP market is affected by the rise in MB prices due to low inventory of propane in the United States. US propane inventories have increased recently, but remained at about 70% of the same month last year, and the grain harvest season also overlapped, resulting in low inventories. Cold waves in some parts of Asia and North America also boosted heating demand. On the other hand, traffic congestion on the Panama Canal was eased, and Saudi Arabia did not cancel additional cargo, and these factors somehow curb the price, but propane was priced at $ 800 following the sharp rise in crude oil. The increase has been for 5 consecutive months. The propane butane inequality was $ 5.
In addition, after October, demand for heating will become even stronger in Europe, and the supply and demand of natural gas will be tight worldwide, so there might be additional demand for LPG as alternative energy resource replacing natural gas, thus prices will skyrocket. Australian coal has also doubled since the beginning of the year, and serious electricity shortages happen in Europe and China, resource prices are at very high level globally, now the world should be careful about inflation.