Gas Market Report.

(From Lloyds List)

NORTH WEST EUROPE: Large propane cargoes have picked up for December, especially after the first decade with levels talked in the high $480s'low 490s. However, end November and early December trades are still looking at large discounts to December with talk in the minus $6-10 range. Handy cargoes that usually demand a premium against the 20 kt cargoes are almost non existent. With the large discounts on 20 kts then if the handy buyers need to buy, which they don't at the moment, then they are happy to pay 2 port economics on the larger ships.

Butane remains un-traded and with expectations that sellers will have to start moving cargoes then prices are assumed to be in the $470s.

The coaster propane market remains fairly inactive due to relatively mild weather keeping demand at a low level. Although refinery availabilities are still constrained there is sufficient terminal product available to meet the limited buying interest. FOB numbers are currently talked in a mid $490s-low $500s range, with one deal recently reported at around $500 FOB Tees. There are still no signs of any up-turn in demand for CIF propane cargoes with workable prices notionally in the $540s.

The butane coaster market is very quiet this week. With naphtha and gasoline prices going down, petchems are not interested to buy and product is too expensive to blend. Product is available ex terminal and ex-refineries but buying interest is scarce. The FOB level is talked in the $520s while the CIF level is talked in the $550s.

MEDITERRANEAN: Large cargoes: CIF large cargo remains quiet in the area on both grades. Prices remained assessed at parity or so to CIF ARA prices. Propane storages are rather full everywhere with local outlets relaxed due to weather continuing to be mild for the season. Good quality butane demand is seen as limited and the expected extra split cargoes for Turkey in December seem to have vanished, at least for now.

Coaster cargoes: On the propane side, little demand is seen but prices are staying firm as sellers looking at December replacement cost for any prompt demand. The price of butane has weakened in the region and some of the Lavera production was sent to petchems. The monthly Moroccan butane buy tender (30 kt, small lots of 4-6 kt 1-15 December): results are reported basis 2'3 to a major, and 1'3 to a trader, at a differential in the low $30s. This should provide price support in a few weeks, in the meantime prompt tonnes will stay under pressure.