Edmonton propane delivered at USG and less

OREANDA-NEWS. June 01, 2015. Western Canadian propane out of Edmonton, Alberta, is being delivered at prices of 0?/USG and less, market sources told Argus this week.

Edmonton propane's high/low spot price fell below 0?/USG on Tuesday, amid plummeting NGL prices across North America, and marketers have since confirmed propane deliveries done at those levels.

Propane's price has since fallen lower, to a midpoint of -4.375?/USG on Thursday, as US midcontinent NGL values dropped midweek.

Traders have said that they have received not only free propane, but have actually been compensated to move product. Compensation has come either in the form of a credit against other purchases or as discounted freight costs bringing the transaction back to positive values.

Some buy-side traders have advised their clients to enter the spot market before prices bounce back.

Traded spot volumes are often those that marketers had tied to storage contracts, mostly involving propane loaded into railcars, though participants say the market is thin.

Market sources have also reported administrative issues with conducting business at a negative price, namely that many financial management systems cannot issue a negative invoice.

Some contracts include prices clauses limiting the transaction to a value no less than 0?/USG.

Edmonton propane is expected to rise today amid higher benchmark US crude prices.