The US Energy Information Administration (EIA) said that spot prices of hydrocarbon gas liquids (HGL) are generally tied to crude oil and natural gas prices. According to EIA, a collapse in oil prices and persistently low gas prices compressed HGL spot prices in April into a narrow range during a period of mid-March to end-April of 2020. HGLs are typically priced based on their heat content and within crude oil prices as the upper bracket and the prices of natural gas as the lower bracket
On a heat-content equivalent basis, ethane prices are generally similar to natural gas prices. Ethane has two carbon atoms, compared to one in methane that primarily constitutes natural gas. The increase in ethane supply has outpaced the expansion in the petrochemical industry, EIA said. The excess supply is left in the natural gas stream, which usually raises natural gas’ heat content slightly.
Propane has three carbon atoms and is the second-lightest HGL. Propane prices have trended closer to other petroleum products as it can substitute other fuels for space heating, transportation, or petrochemical feedstock. US propane prices are typically lower than other petroleum products and international propane markets because of a supply surplus and high transportation costs to reach overseas markets.
Prices of heavier HGLs are typically closer to that of crude oil. Normal butane and isobutane are usually used to produce high-octane gasoline blending components and to blend motor gasoline in the winter. Meanwhile, pentanes can be used as a blowing agent for polystyrene foam. Natural gasoline can be mixed into motor gasoline at any time of the year or added to fuel ethanol as a denaturant.