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Analysis: Isobutane’s strength over butane caused by short-covering, outage
HOUSTON, December 10, 2015 (PCW) -- Gulf Coast spot isobutane has held a strong premium over butane Since the week of November 23 due to a spate of short-covering and concern over a reported isomerization unit outage.
Since that time, isobutane’s premium hit a high of 4.75 cpg on November 30, PetroChem Wire prices show, exhibiting unusual strength. In comparison, for the year to date, the average premium for isobutane has been 0.2 cpg (see table below).
End-of-the-month short-covering was partly behind isobutane’s strength with at least two major shops seen out in heated buying mode.
But a reported unexpected outage at one of the larger isomerization units had also resulted in a major producer turning to the spot market to fulfill contractual obligations. -- Samantha Hartke
To read the full analysis, check out NGLs Week here.