Butane
Mont Belvieu (OPIS) / CME
The C4 of the NGL barrel: normal butane for winter gasoline, isobutane for the refinery alkylation unit.
Top Producers
approximate share of world butane/LPG supply (indicative)
Main Uses
indicative split of butane demand by end use
Place in the barrel
C4, between propane and natural gasoline
structural
Two isomers
normal (gasoline blend) and iso (alkylation)
structural
Hub
Mont Belvieu, Texas (OPIS / Argus)
as of 2026
Pricing
cents per gallon, often a percentage of WTI
as of 2026
Butane is the C4 rung of the natural gas liquids (NGL) barrel, sitting between propane and natural gasoline, and it comes in two isomers that go to completely different markets. Normal butane is mostly a gasoline blendstock: cheap and high-octane but volatile, it is blended into the winter gasoline pool and pulled out in summer when vapor-pressure limits tighten, and it also feeds petrochemical crackers and LPG. Isobutane is the feedstock for alkylation, the refinery unit that combines it with olefins to make alkylate, a clean, high-octane premium gasoline component; refiners isomerize normal butane into isobutane to feed it.
Like the rest of the NGL barrel, butane is overwhelmingly a US shale story. The boom in wet shale gas flooded the market with NGLs, and the pricing hub is Mont Belvieu, Texas, the great NGL fractionation and storage complex on the Gulf Coast (with Conway, Kansas, a smaller midcontinent hub). Surplus US butane is exported as LPG, often blended with propane, to Asia and Latin America.
There are active US markets. Physical butane trades against OPIS and Argus assessments at Mont Belvieu, quoted in cents per gallon, and CME lists financially-settled OPIS Mont Belvieu normal butane swap futures alongside its propane and natural-gasoline contracts. Butane often trades as a percentage of crude (WTI), the convention for valuing NGLs against the oil they price off.
How It Trades
| Venue | Mont Belvieu physical (OPIS, Argus); CME OPIS-settled swaps |
| Benchmark contract | OPIS Mont Belvieu normal butane; CME normal butane (OPIS) swap future |
| Contract size | CME swaps 42,000 gallons (1,000 barrels); physical in barrels |
| Price terms | US cents per gallon (often quoted as a percentage of WTI) |
| Settlement | Physical at Mont Belvieu; CME contracts financially settled against OPIS |
| Typical curve | Strongly seasonal: firm in autumn and winter, weak in spring as gasoline blending stops |
| Liquidity | An active US NGL market; less liquid than crude or propane but a real hedging tool |
Supply and Demand
Top producers
- United States: the dominant producer, from shale gas processing and refineries
- Middle East (Saudi Arabia, Qatar): large LPG exporters
- Other gas-processing regions worldwide
Butane is a by-product of gas processing and refining; US supply is set by shale activity, not by butane demand.
Top consumers
- Gasoline blenders (normal butane, seasonal)
- Refinery alkylation units (isobutane)
- Petrochemical crackers and LPG markets
- Asia and Latin America (imported LPG)
Major uses
- Winter gasoline blending (normal butane)
- Alkylation feedstock for premium gasoline (isobutane)
- Petrochemical cracking and LPG fuel
What Moves the Price
- Gasoline blending economics and seasonal RVP (vapor pressure) rules
- Crude oil and gasoline prices (butane is priced off them)
- US shale NGL production
- Alkylation demand for isobutane at refineries
- LPG export demand from Asia and Latin America
Moments That Made the Market
2010s
The US shale boom floods the market with NGLs, making the US a butane and LPG exporter.
Ongoing
Seasonal gasoline-blending demand and summer RVP limits drive butane's yearly price cycle.
What Changed Since the 2010 Era
- Shale turned the US from an LPG importer into a major butane and LPG exporter.
- Mont Belvieu became the global NGL pricing and storage hub.
- Financially-settled OPIS swaps gave the NGL barrel real hedging tools.