Oil falls after Harvey floods US refineries

MOSCOW (MRC) -- Oil prices slipped on Friday in the wake of Hurricane Harvey, which has killed more than 40 people and brought record flooding to the oil heartland of Texas, paralyzing a quarter of the US refining industry, reported Reuters.

Harvey, downgraded to a tropical storm and losing steam as it moved inland, shut at least 4.4 MMbpd of refining capacity.

That sparked fears of a fuel shortage before the Labor Day weekend and cut refinery demand for crude, widening the spread between US gasoline and crude.

This gasoline "crack spread" hit a high of USD27.79 a barrel on Friday, up USD10 in a week.

Brent crude for November was down 40 cents at USD52.46 a barrel by 1350 GMT. The Brent contract for October, which expired on Thursday, closed up USD1.52 at USD52.38.

US crude was last down 40 cents at USD46.83 a barrel. The contract rebounded 2.8% on Thursday but is heading for a weekly decline of around 2%.

"Natural disasters generally are negative over the medium term due to demand destruction, but in the short term the market reacts to the shortage of supply," said Jason Gammel, oil and gas analyst at US investment bank Jefferies.

The US government tapped its strategic oil reserves for the first time in five years on Thursday, releasing 1 MMbbl of crude to a working refinery in Louisiana.

An adviser to President Donald Trump told a White House briefing more oil could be released from reserves.

"We would be very comfortable tapping into that," homeland security adviser Tom Bossert told reporters.

US crude oil stocks fell sharply last week as refineries raised output with the approach of Harvey, the Energy Information Administration said.

The oil market outside the United States remains well supplied with ample production by the Organization of the Petroleum Exporting Countries.

As informed earlier, 29 August, benchmark European gasoline refining margins spiked nearly 9% to their highest since April after more than 2 MMbpd of US refining capacity was knocked offline by Hurricane Harvey. Harvey knocked out 13% of refining capacity in the US, the world's largest oil consumer, while the continuing rain and flooding threatened other units, including the country's largest refinery, it was said then.
MRC

Ar-Razi Saudi Methanol Plant Shuts Unexpectedly

MOSCOW (MRC) -- Ar-Razi Saudi Methanol has taken off-stream its No. 4 methanol plant at Al-Jubail, according to Apic-online.

A Polymerupdate source in Saudi Arabia informed that the company has halted operations at the plant early this week. The plant is expected to resume production on October 17, 2017.

Located in Al-Jubail, Saudi Arabia, the No.4 plant has a production capacity of 850,000 mt/year.

As MRC informed before, in June 2016, Saudi Arabian Oil Co. (Saudi Aramco) and Saudi Basic Industries Corp. (Sabic) became one step closer to building their first plant to process crude directly into chemicals, cutting out a link in the production chain from hydrocarbons to the finished products that go into plastics and other consumer goods.

The state-owned companies signed an agreement to study such a project to be located in Saudi Arabia, they said in a statement. A joint venture is possible if the companies decide to move ahead after the study is completed, they said. Oil companies normally refine crude into transportation fuels including gasoline and diesel and leave byproducts such as naphtha to be processed separately into chemicals.
MRC

Corpus Christis storm-ravaged energy industry begins slow recovery

MOSCOW (MRC) — Oil refiners and port facilities in Corpus Christi, Texas, were making strides resuming operations from Hurricane Harvey, but Houston and other Gulf Coast energy hubs remained flooded, said Reuters.

Their efforts, which could take weeks to complete, must be repeated across a broad swath of coastal Texas and Louisiana before America's oil and fuel production can fully recover from deep cuts caused by record flooding. Power has been restored to all four Corpus Christi-area oil refineries and the Army Corps of Engineers is conducting final surveys of the port's waterways before fully reopening early next week, according to port officials.

"We are keeping our target of a full reopen by Sept. 4," said Patricia Cardenas, a port spokeswoman. Refiners Citgo Petroleum Corp, Flint Hills Resources and Valero Energy Corp are moving to restart their plants in Corpus Christi, as is the nearby Valero Three Rivers refinery, according to sources, company officials and filings.

On Thursday, energy industry intelligence service Genscape said the Flint Hills Corpus Christi refinery restarted its largest crude distillation unit, which feeds all other units at the refinery.

All were shut by Aug. 25, hours before Harvey roared ashore just north of the city with winds over 130 mph. Those four plants together have a capacity to refine 835,979 bbl of crude oil per day, or 4.4% of the nation's total. Nearly a quarter of US refining output is offline in the wake of the storm, as other plants in Texas and Louisiana also shut.

On Thursday, the US Coast Guard began allowing vessels with up to 43 ft to enter the city's port during daytime hours. Such vessels are able to hold about 500,000 bbl of oil. The Intracoastal Waterway between Corpus Christi and Brownsville, Texas, also is open, it added.

"Getting that port up and running is just so important," said Cleo Rodriguez Jr., president and CEO of the United Chamber of Commerce of Corpus Christi. "It is the economic engine for the entire region."

Some USD100 MM of goods typically moves through the port daily, according to port officials. Rodriguez said he felt lucky Corpus Christi did not receive worse damage from Harvey, the most powerful storm to strike the state since 1961.

"Our member businesses have reported significant losses here, but so far nothing huge or catastrophic," he said. "Our neighbors, like Rockport, were not so lucky. There was complete devastation there."

He said he expected Corpus Christi business to mostly recover by the end of September.
MRC

US oil set for biggest monthly loss in over a year as floods hit demand

MOSCOW (MRC) - US crude oil prices are on track to post the steepest monthly losses in more than a year on Thursday as concerns spread over falling demand in the world's top oil-consuming country after storm Harvey knocked out almost a quarter of its refineries, said Hydrocarbonprocessing.

But prices rallied in the oil products markets, with US gasoline futures hitting a two-year high above USD2 a gallon, buoyed by fears of a fuel shortage just days ahead of the Labor Day weekend that typically sees a surge in driving.

Harvey, which brought record flooding to the U.S. oil heartland of Texas and killed at least 35 people, has paralysed at least 4.4 MMbpd of refining capacity, according to company reports and Reuters estimates. The country's biggest fuel transport system, the Colonial Pipeline, also said it would shut its main diesel, jet fuel and gasoline lines because of outages at its supply points.

Traders from Europe to Asia were scrambling to fix fuel cargoes to the United States, with price reporting agency Argus registering a record monthly trade volume of European gasoline barges. Analysts at Goldman Sachs and Stifel said infrastructure outages could last several months, although it was difficult to estimate the exact damage.

"We still expect production growth to resume, however Harvey probably pushed it out a couple of months or maybe even a quarter," said analysts at Stifel. Crude markets remained weak after sharp losses in the previous session. The closure of so many US refineries has resulted in a slump in demand for the most important feedstock for the petroleum industry.

US West Texas Intermediate (WTI) crude futures were set to close the month down 8%, their steepest monthly loss since July 2016. They traded at USD46.09 a barrel at 1201 GMT, up 13 cents on the day, after falling more than 1 percent on Wednesday.

International benchmark Brent crude was at USD51.22, up 36 cents from the previous session, when the contract fell more than 2 percent. "Refineries outside the affected area may delay maintenance to benefit from high processing margins," said Carsten Fritsch, oil analyst at Commerzbank.

"Hence, the negative impact on crude oil demand and oil product supply might be less severe than feared." U.S. crude and product stocks, typically watched closely by oil investors as they reflect market balancing, were largely ignored this week.

U.S. commercial crude stocks fell by 5.39 MMb last week to 457.77 MMb, the US Energy Information Administration said on Wednesday. That's down 14.5% from record levels reached in March.
MRC

SDK Group to found new liquefied CO2 gas plant in Oita Petrochemical Complex

MOSCOW (MRC) -- Showa Denko Gas Products Co., Ltd. (SGP), a consolidated subsidiary of Showa Denko headquartered in Kawasaki City, Kanagawa Prefecture, has decided to found a new plant to produce liquefied carbon dioxide (CO2) gas in Showa Denko's Oita Petrochemical Complex located in Oita City, Oita Prefecture, said Yourpetrochemicalnews.

SDK and SGP plan to make the new plant utilize stable CO2 gas sources in the chemical plant of the Complex. The new plant is scheduled to be completed and start operation in August 2018, and will have annual production capacity of 15,000 tons. Foundation of the new plant will make SGP's liquefied CO2 gas production system to have two production bases in Kyushu region.

CO2 gas and dry ice (solidified CO2) are used in many fields including beverage, food, and other manufacturing industries. Liquefied CO2 gas is made of CO2 gas generated as a by-product of oil-refining, steel-making and ammonia production processes. However, the scaling back of oil-refining and ammonia production processes in Japan has been resulting in reduction in sources of raw CO2 gas to produce liquefied CO2 gas. Thus a tight supply-demand situation for liquefied CO2 gas and dry ice is chronic.

The Showa Denko Group produces and provides liquefied CO2 gas and dry ice at many production bases including Kawasaki Plant, which functions as the main base. To solve tight supply-demand situation and regional supply-demand imbalances concerning liquefied CO2 gas and dry ice, and to maintain stable supply of these products to our customers throughout the country, the Showa Denko Group has been increasing production of them at Kawasaki Plant, supplying them through long distance transportation, and importing dry ice even in off-peak seasons other than summer until now. However, substantial rises in transportation and raw material costs are problems to be solved as soon as possible.

Since further reduction in sources of raw CO2 gas is foreseen, the supply-demand situation for liquefied CO2 gas and dry ice is expected to be even tighter in the future. To cope with these problems and maintain stable supply of liquefied CO2 gas and dry ice to our customers in Kyushu, Chugoku, and Shikoku regions, SDK and SGP decided to found the new base to produce liquefied CO2 gas in the Showa Denko Group's Oita Petrochemical Complex. Taking advantage of the strengthened supply system, SDK and SGP will cope with changes in the supply-demand balances of liquefied CO2 gas and dry ice in a flexible and timely manner, while having due regard to further expansion of the Group's capacity to produce these products in the future.

In our ongoing medium-term business plan, "Project 2020+," we position our industrial gases business including CO2 gas and dry ice business as "Base-shaping" business. The Showa Denko Group will further strengthen the basis of our industrial gases business through various measures including development of new uses in the fields of foods, agriculture, and civil engineering.

Showa Denko K.K.is a major manufacturer and marketer of chemical products serving a wide range of fields ranging from heavy industry to the electronic and computer industries. The Petrochemicals Sector provides cracker products such as ethylene and propylene, the Chemicals Sector provides industrial and high-performance gases and chemicals and high-purity gases and chemicals for the semiconductor industry, and the Inorganics Sector provides ceramics products such as alumina, abrasive, refractory and graphite electrodes and fine carbon products. Today, the Aluminum Sector provides aluminum materials and high-value-added fabricated aluminum, the Electronics Sector provides HD media, compound semiconductors such as ultra high-bright LEDs and rare earth magnetic alloys, and the Advanced Battery Materials Department (ABM) provides lithium-ion battery components.
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