HOUSTON (ICIS)--US ethane spot prices at the Mont Belvieu hub in Texas surged to a 16-month high on Thursday, topping 30 cents/gal for only the second time since March 2013.
Ethane spot prices reached 33.50 cents/gal in early trading on Thursday, the highest price since the week ending 19 October, when prices were in a range of 33.50-34.00 cents/gal according to ICIS Pricing.
Since then, prices have stabilised for the most part, staying in the mid-20s cents/gal range, as demand from ethane crackers has remained relatively steady.
Sources said a major buyer got caught short on ethane this month, spiking demand.
Spot prices also got a boost from a bullish natural gas storage report from the US Energy Information Administration (EIA), which showed a larger-than-expected draw on supplies of 287 billion cubic feet (bcf) for the week ended 10 January.
The EIA said natural gas supplies were also 659 bcf lower year over year.
Ethane demand waned shortly after the first of the year on several short-term cracker outages, after reaching 29.00 cents/gal in late December 2013.
Follow Bobbie on Twitter