Here are the latest details from the U.S. Energy Information Administration regarding natural gas inventories.
Although crude oil and natural gas production declined, the U.S. production of natural gas plant liquids (NGPL), including ethane, propane, isobutane, natural gasoline, grew in 2020.
The annual average of NGPL production rose 7.0% in 2020, reaching 5.2 mbpd. U.S. field production of crude oil and natural gas both suffered over this period, decreasing by 7.7% and 1.9%.
When ethane demand is low and thus pushes prices lower relative to natural gas prices, natural gas processing plant operators tend to leave ethane in its unprocessed state and sell it into the market – a process known as ethane rejection.
Usually, when ethane prices rise more than natural gas prices on a heat-value basis, natural gas processing plant operators may want to recover the ethane and other products and sell it for their original market value.
Sources: eia.gov
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