Gas Market Report.

(From Lloyds List)

NORTH WEST EUROPE : Large cargo propane prices are showing a definite downward movement with a 40 kt cargo arriving in the area and at least two 20 kt cargoes available, all in the first ten days. This along with crude and naphtha has led to price levels around the low $500s being talked. However, with still some demand for the smaller handy size cargoes buying has been seen in the $520s for early March arrival. This has led to confusion in prices and has created a definite two tier system with the large cargo sellers examining the possibility of selling small parcels off their vessels.

Butane has followed the trend of crude and naphtha and is viewed by most players as being in the $510-520 range. However, with a stand-off between buyers and sellers then it is difficult to predict where the next cargo is coming from as well as where the next buying requirement is. Therefore prices are very unstable and could very easily move up against most expectations of further downward movement.

Even with the weather turning colder, activity on the propane coaster market remains limited. We have seen selling interest pushing the prices down without getting any firm buying. Contractual deliveries are being done within the parties' own systems and trading opportunities in such a market are scarce. The FOB level is talked in the $530s and is decreasing while the CIF level is talked in the $560s.

Although availabilities of coaster butane remain somewhat limited, spot prices have nevertheless drifted down to petchem levels. A couple of field grade quality cargoes were sold last week in a $500 -- $510 CIF range, but since then talking numbers for …