US Gulf Coast isobutane on Friday continued the uptrend from the day before and increased 50 points to achieve a new high in 22 months, mainly supported by prompt downstream demand.
Isobutane at Enterprise's terminal in Mont Belvieu, Texas, rose to 82.875 cents/gal, widening the premium over normal butane to 8.75-cent Friday.
Prices first reached the highest seen in 22 months at 82.375 cents/gal Thursday, at a 7.75-cent premium over normal butane. It was last seen at similar levels on December 4 at 84.25 cents/gal, but was 25 points under normal butane prices.
Several market sources noted that refiners have been buying prompt isobutane to make alkylate on "cheap alkylate feed," in spite of the pending shift to higher RVP levels typically seen in winter specification gasoline.
Alkylate -- a high octane gasoline blendstock often used in summer gasoline -- is produced by feeding isobutane and refinery grade propylene into an alkylation unit.
FOB Houston alkylate barge prices weakened 1.1 cents to unleaded gasoline plus 15.65 cents/gal Friday as demand outstripped supply, a blendstocks trader said.
US Energy Information Administration data released October 5, however, showed that stocks of gasoline components -- the category containing the most-used component, alkylate -- rose 1.184 million barrels to 29.332 million barrels in the week that ended September 30. At about the same time in 2015, stocks were at about 26.8 million barrels.
Another trader added that MTBE, another downstream blendstock of isobutane and methanol, had also provided some pricing support to isobutane earlier this week.
FOB USG MTBE was assessed at $1.7620/gal Friday, down 2.80 cents. Prices hit its highest level in nearly four months on October 4 at $1.8450/gal FOB USG. The assessment marked the highest level since reaching $1.8740/gal FOB USG on June 10, according to S&P Global Platts data.
