Saudi Aramco increases February LPG contract prices

31 January 2012 14:59  [Source: ICIS news]

LONDON (ICIS)--Saudi Aramco has increased its liquefied petroleum gas (LPG) contract prices for February, a source at the state-owned company said on Tuesday.

The propane contract price has firmed by $160/tonne (€122/tonne) to $1,010/tonne FOB (free on board) Ras Tanura, while the butane contract price has increased to $1,040/tonne FOB Ras Tanura, up by $130/tonne from January.

Northwest Europe has recently experienced healthy propane supply as weather conditions have been mild, reducing demand for propane as heating fuel and limiting crude oil-induced price increases.

However, the source expects propane prices to strengthen in the coming weeks as stocks in Asia are low. Lack of supply there has resulted in spot volumes moving from Europe to Asia. This could lead to tighter propane availability in Europe.

In addition, the onset of colder temperatures across Europe is likely to result in higher demand and firmer pricing for propane, the source added.

Butane supply remains fairly tight, with healthy levels of buying interest from the Mediterranean region supporting prices and resulting in the movement of small cargoes from northwest Europe to the south.

($1 = €0.76)

By: Sarah Trinder
+44 20 8652 3214

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