Bullish outlook for NGL prices - Dec 22
Posted: Tue Dec 22, 2020 10:22 am
Stifel's outlook for NGL prices as of 12-22-2020. Good news for AR, EQT, RRC, SBOW. CRK and GDP are Haynesville companies that produce mostly dry gas.
The most notable component of the NGL barrel that
is expected to increase through 2022 is ethane.
Specifically, in 2021 we see ethane prices increasing
to over $11/bbl on average, which is over a $3/bbl
increase from 2020 averages.
Propane prices are expected to increase in late 2021
and throughout 2022. By the end of 2022 ethane
and propane prices are expected to see an
approximate 70% increase compared to January
2020 levels.
We note ethane and propane constitute roughly 70%
of the NGL barrel.
NGL prices in 2020 were impacted by the crash in
crude oil prices and partially from reduced demand
for refined products (impacting butane and natural
gasoline). That said, in 2021 and 2022 IHS estimates
a significant increase in NGL prices.
We estimate NGL prices are expected to increase on
average about 20% in 2021 when compared to 2020.
Additionally, 2022 estimated prices are expected to
be nearly 13% higher than 2021.
We believe NGL prices are supported by incremental U.S.
petrochemical and international demand.
The most notable component of the NGL barrel that
is expected to increase through 2022 is ethane.
Specifically, in 2021 we see ethane prices increasing
to over $11/bbl on average, which is over a $3/bbl
increase from 2020 averages.
Propane prices are expected to increase in late 2021
and throughout 2022. By the end of 2022 ethane
and propane prices are expected to see an
approximate 70% increase compared to January
2020 levels.
We note ethane and propane constitute roughly 70%
of the NGL barrel.
NGL prices in 2020 were impacted by the crash in
crude oil prices and partially from reduced demand
for refined products (impacting butane and natural
gasoline). That said, in 2021 and 2022 IHS estimates
a significant increase in NGL prices.
We estimate NGL prices are expected to increase on
average about 20% in 2021 when compared to 2020.
Additionally, 2022 estimated prices are expected to
be nearly 13% higher than 2021.
We believe NGL prices are supported by incremental U.S.
petrochemical and international demand.