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ANALYSIS: Normal butane prices at record seasonal lows as blending demand slows

HOUSTON, March 17, 2016 (PCW) -- Spot normal butane prices have entered the summer gasoline blending season at record seasonal lows, making the purity product increasingly vulnerable to further price weakness.

The primary demand driver for butane is gasoline blending and, during the summer driving season, less butane is used for blending. As such, butane demand can go from a high of about 700,000 b/d during the winter gasoline season --- when more butane is used --- to around 90,000 b/d when the summer blend takes hold.

For the month-to-date, spot butane prices are averaging about 54.8 cpg, the lowest it has been for this time of year since PetroChem Wire first began assessing spot NGL prices (see graph, page 1). The recent price weakness has come even as crude oil prices are trending higher, further pointing to the drop-off in demand. -- Samantha Hartke

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