Contraction expected in deep-sea sources

Sep 06, 2023

In the past two weeks, ethane prices in the United States have experienced a substantial increase, reaching nearly 40 cents per gallon, marking the highest level since the end of 2022. Historically, the average ethane price in the US region has ranged between 20 and 30 cents per gallon.

This recent surge in ethane prices can be attributed to the higher summer temperatures, leading to an increased demand for natural gas for electricity. Following Texas's consecutive 11 peak electricity demand records last summer, the Texas Reliability Council has forecasted that the electricity consumption in the state will break historical records set on June 27th several times in July. On July 13th, it reached 82,732 megawatts, and on July 17th, it reached 83,843 megawatts, with July 18th reaching 84,135 megawatts.

Another contributing factor is the impact of high temperatures on distillation and refrigeration capacity in the Texas region, leading to a decrease in LNG distillation capacity and forcing some ethane to be reinjected, resulting in reduced production.

Contraction expected in deep-sea sources
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