Asia monoethylene glycol prices to firm in the next two months

(ICIS) -- Asia monoethylene glycol (MEG) prices are expected to firm in the next two months because of the start-up of new downstream polyester capacities, stable supply and strong demand from the textile sector, industry sources said on Thursday.

Asia MEG prices were at USD 1.200-1.205/tonne (EUR 840-844/tonne) CFR (cost & freight) CMP (China Main Port) at the close of trading on 20 July, up by USD 40/tonne from 12 July levels, according to ICIS data.

⌠Many speculative traders are in the market to seek cargoes as they believe MEG prices will not have a big risk of falling and even have the potential to rise in the second half of this year. This is because there will be no additional MEG capacity expansion in 2011 and 2012, but some new downstream polyester plants will come on stream in the following months, a trader said.
Around 1.3m-1.5m tonnes of polyester capacities are expected to start up in the third quarter, market sources said.

As a result of the positive market outlook, many traders have been actively purchasing August and September cargoes in anticipation of a price increase, sources said.

MRC

(Arabian Oil and Gas) -- Consulting engineers for DNO have estimated a midrange of 636 million barrels of recoverable oil at the Tawke field in the northern part of Iraqi Kurdistan.

DNO, whcih operates the field, said the estimate is more than double the previosu year end 2010 estimate of 306 million barrels, and far exceeds company expectations of even a few months ago. The new figure certainly was not envisaged when the company made the Tawke discovery in 2006, according to a company statement.

Tawke's original oil in place is estimated at 1.748 billion barrels, and the estimated recovery factor of 36.4% is based on the 2011 production profile and updated geological reservoir models. Tawke production averages 70,000 barrels per day.

Meanwhile, DNO estimate midrange recoverable resources of 100 million barrels for Bastora and 36 million barrels for Benenan, its oil discoveries on the company's Erbil exploration and production license. DNO declared these fields commercial on 25 June this year, and plans to file development plans by year end.

MRC

(Reuters) - Asia's naphtha price rose more to reach a nine-week high on Tuesday, with cracks rising to around a six-week high to echo the strength in Europe on stronger demand.

Most traders were not convinced that Asian fundamentals have improved, citing ample stocks and weaker overall demand. Physical naphtha timespreads were still negative, inidcating that the Asian market has not improved, with South Korea's S-Oil having to sell 33 KT of light naphtha for Aug. 21-31 loading at a discount of about USD 2.50 a tonne to Japan spot quotes on a free-on-board (FOB) basis.

Separately, several Japanese oil refiners have halted marine product shipments from at least nine plants as a powerful typhoon approaches. This came at a time when Japan's top oil refiner JX Nippon Oil & Energy Corp had shut a 60,000 barrels-per-day (bpd) No.3 vacuum distillation unit after the fire. It had also lowered crude runs at a 150,000 bpd crude unit.

MRC

MOSCOW (MRC) -- Low demand for low-density polyethylene (LDPE) along with steady work of Russian producers and small volume of exports stipulate surplus in the market. These factors as well as high competition among Russian producers has led to the next reduction of prices, according to ICIS-MRC Price report.

This year is quite difficult for Russian producers of LDPE. Low demand for polyethylene both in domestic and foreign markets limits sales. As a result, by June manufacturers had faced a problem of significant LDPE stocks, despite the fact that since mid-April till mid-May the largest LDPE capacities in Russia - Kazanorhsyntez - had been suspended.

From mid-June increased competition forced Russian producers to low LDPE prices in the domestic market. The prices actually declined each week. This week is not an exception. The price offer in the spot market for 158 LDPE (Ufa) reduced to RUB 58.000 -58.500/t, including VAT, FCA Ufa. Kazanorhsyntez reduced the price for 158 LDPE to RUB 58.000 -58.500/t, including VAT, FCA Kazan.

Since June, the Russian producers have been trying to increase LDPE exports in order to balance the domestic market. However low demand in foreign markets, as well as problems with railway transportation don't yet allow to increase polyethylene export significantly. For thirty days starting from July 19, Tomskneftechem's capacities were suspended that along with export sales may possibly allow Russian producers to reduce the surplus in the domestic market by the end of August.

MRC

(Platts) -- China's offshore oil and gas producer CNOOC Ltd said Wednesday that its subsidiary CNOOC Luxembourg has entered an agreement to acquire oil sands developer OPTI Canada for approximately USD 2.1 bln. The transaction is expected to be completed in the fourth quarter of this year, subject to government and regulatory approvals, CNOOC said in a statement.

OPTI owns a 35% stake in the Long Lake oil sands project, while operator Nexen holds the balance. The Long Lake project includes a steam assisted gravity drainage operation and an upgrader.

According to CNOOC, the SAGD Operation is expected to have throughput rates of approximately 72,000 b/d of bitumen at full production and the upgrader is expected to produce approximately 58,500 b/d of sweet crude at full capacity.

MRC