On Friday, WTI crude oil prices finished at $102.58 per barrel, compared to $102.59 per barrel the week prior. Crude prices were volatile during the week.
Crude oil inventories increased by 1.43 million barrels—higher than analysts’ expectations of a build of 1.08 million barrels.
On February 27, 2014, the EIA reported that natural gas inventories decreased by 95 bcf (billions of cubic feet) for the week ended February 21, bringing current inventories to 1,348 bcf.
BWP’s parking and lending services allowed natural gas marketers to profit from short-term volatility in natural gas prices.
The amount of revenue garnered with capacity reservation charges under firm transportation agreements was $45 million lower than during 2012.
To give some brief context, Boardwalk Pipeline Partners is a master limited partnership, a special type of entity exempt from corporate taxes.
Last week, the price of a representative barrel of natural gas liquids decreased from $50.57 per barrel to $48.37 per barrel, a 4.5% decrease on the week.
Natural gas liquids, or NGLs, are a group of hydrocarbons (ethane, propane, butanes, and pentanes) that are often found alongside dry natural gas (methane).
This past week, natural gas prices rose almost 18%, which was a positive signal for natural gas–weighted producers in the short run.
The longer-term stable and elevated oil price has been positive, as crude prices have largely remained above $80 per barrel since late 2010.
On February 20, 2014, the EIA reported that natural gas inventories decreased by 250 bcf (billions of cubic feet) for the week ended February 14.
On February 20, the DOE reported the inventories data for crude for the week ended by February 14. Crude oil inventories increased by 0.97 million barrels.
The larger scale of a company like APU provides better buying and negotiating power, such as the ability to secure propane supplies that would have otherwise been bound for export markets.
U.S. propane inventories at the end of December were 46 million barrels, 21 million barrels below that of December 2012 and 19% below the five-year average.
As cold weather has boosted propane demand over the past few months, two other factors have also worked to boost propane demand.
WTI-Brent spread traded slightly narrower last week. WTI had been trading as low as $23 per barrel under Brent in February of 2013. Over the course of the year, the spread narrowed due to several factors.
NGL prices traded down by 4% on the week, as most of the composition experienced a drop in price. However, the representative NGL barrel remains up over 50% since lows in June.
WTI traded flat last week, but firstly traded up $100 per barrel since December 27. This past week’s upward movement in prices was a short-term positive for the sector.
Natural gas traded up by more than 9% on the week due to a bullish inventory report and cold weather. Natural gas has been trading at low levels over the past few years.
Last week had colder-than-normal weather, a positive for propane companies such as AmeriGas Partners (APU), Ferrellgas Partners (FGP), and Suburban Propane Partners (SPH).