US Gulf Coast natural gasoline spiked 3.75 cents Friday to a
near-three-year high as market sources pointed to price volatility from a thin
market ahead of the Christmas holiday.

December non-Targa natural gasoline, or C5, rose to $1.4225/gal based on
a final trade at that level in the Platts Market on Close assessment process.
It was natural gasoline’s highest assessed value since March 26, 2015,
when it was at $1.4375/gal.

During the early close, Glencore bought a Trafigura offer for 25,000
barrels of C5 at $1.4075/gal before Trafigura took Vitol’s $1.4225/gal bid.
Natural gasoline prices moved higher throughout the morning after trading
at $1.39/gal early Thursday.

Nearby Lone Star and Targa barrels were heard 3 cents/gal below
non-Targa.

In discussing C5’s “monster” day, sources also noted that one cargo of
natural gasoline is reportedly aboard the British Serenity headed for South
Korea. Another C5 cargo could load from Enterprise Beaumont at the end of the
month, a trader said.

“We have seen more cargoes in the shipping market getting booked to Asia
ex-Gulf Coast, but not a substantial amount,” a second trader said. “Maybe a
handful on top of the usual term stuff.”

The December/January natural gasoline spread widened 25 points to 50
points backwardated.

Elsewhere in NGLs, butane and propane also saw their structure flip into
backwardation.

December/January butane was heard 50 points backwardated, with December
non-LST up 2.75 cents to $1.06875/gal and isobutane at a 75-point premium.

Non-LST propane’s December/January structure flipped to 25 points
backwardated, but LST maintained its 25-point contango.

December non-LST propane gained 87.5 points day on day to 97.375
cents/gal, or 70% of front-month crude. LST barrels were 62.5 points under
non-LST. LST usually holds a premium over Enterprise barrels in the winter
because of its links to residential heating markets.

Ethane rose 12.5 points to 22.375 cents/gal as gas futures trended
higher.

–Andrea Salazar, andrea.salazar@spglobal.com
–Edited by Valarie Jackson, valarie.jackson@spglobal.com

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