OREANDA-NEWS. US propane prices, which are currently seeing support from steady exports, could rise another 10¢/USG this winter alongside prices in Asia, said Tony Yuen, global energy strategist with Citi Research.

"The export arb is another way to lift US prices," Yuen said at the Petrochemical Feedstocks Association of the Americas conference in Austin, Texas today. "If Japan propane's ratio to crude goes back to 70pc, on $55/bl Brent, once you get the netback from transportation, propane at Mont Belvieu can go up to mid-60s¢/USG before the export arbitrage closes. That means there might be continual pull for propane."

Citi's forecast assumes US fob prices with a 13¢/USG terminal fee.

Citi is forecasting US ethane prices will average 26¢/USG in the fourth quarter of 2016 and rise to the mid-30's¢/USG by the end of next year. Ethane won't exceed that level as supplies are ample, Yuen said.