US crude stocks fall nearly 10 million barrels

MOSCOW (MRC) -- US crude oil stockpiles fell by nearly 10 million barrels in the 1st week of July, far more than expected, as refineries processed the most crude oil since January, reported Reuters with reference to the Energy Information Administration.

Crude inventories fell by 9.5 million barrels in the week to July 5, compared with analysts’ expectations for a decrease of 3.1 million barrels.

Stocks have now fallen for four consecutive weeks, according to the EIA, and this week’s official data follows similar industry estimates from the American Petroleum Institute on Tuesday, which showed a large drop in stocks of 8.1 million barrels.

"The inventory draw was much stronger than expected and also exceeded the already huge draw reported by the API yesterday. This should push oil prices even higher,” said Carsten Fritsch, oil analyst at Commerzbank. “The U.S. oil market is clearly tightening."

Oil prices extended gains after the data. By 10:48 a.m. EDT (1448 GMT), US crude futures were up 3% at USD59.59 a barrel, while Brent gained 3% as well to USD66.06 a barrel.

The market was already higher before the data, partly due to numerous oil majors operating in the Gulf of Mexico shutting drilling facilities and evacuating staff ahead of a tropical cyclone forming in the Gulf, which is bringing high winds and storms.

Refinery crude runs rose by 148,000 barrels per day to hit 17.4 million bpd, the most since early January, responding to higher summer demand.

Refinery utilization rates rose by 0.5 percentage points to 94.7% of overall capacity, also their highest since January. That is even though refinery operations fell to 69.5% of capacity on the East Coast in the wake of the shutdown of the Philadelphia Energy Solutions complex, the largest in the region.

Gulf Coast operating rates were at nearly 98% of capacity - their most since December.

Gasoline stocks fell by 1.5 million barrels, near analysts’ expectations in a Reuters poll for a 1.3 million-barrel drop.

Distillate stockpiles, which include diesel and heating oil, rose by 3.7 million barrels, versus expectations for a 739,000-barrel increase, the data showed.

Net US crude imports fell in the first week of July by 341,000 bpd, while crude production edged up 100,000 bpd to 12.3 million bpd.

Crude stocks at the Cushing, Oklahoma, delivery hub for crude futures fell by 310,000 barrels, EIA said.
MRC

MOSCOW (MRC) -- Russia’s leading plastic pipe extruder Polyplastic Group has invested almost EUR1.5m to launch a production unit manufacturing new multi-layer pressure pipes for water, gas distribution and other applications, said Plasticsnewseurope.

This facility was recently inaugurated at the firm’s Klimovsk pipe plant site close to the capital, which employs 900 and produces a range of 10 mm to 3m diameter standard and corrugated polyethylene pipe.

The innovative ‘MULTIPIPE’ brand pressure pipe will be extruded on five new production lines just installed at Polyplastic’s latest plant extension. A workforce of 45 has been recruited for the operation, situated outside the industrial city of Podolsk.

“This workshop, with five modern lines to produce pressure pipes for water and gas supply and high-voltage electrical cables will allow us to manufacture (annually) an additional 20,000 tons of products,” explained Polyplastic Group’s president Lev Gorilovsky.

Klimovsk plant, set up in 2002, already provides work for nearly 900 employees and runs 25 extrusion lines with an annual output of some 60,000 tons of PE pipe on the 50,000m2 site. The new unit brings the site pipe capacity to 80,000 tons per year.

Much of the output from the new multilayer pipe facility is expected to meet the needs of major infrastructure projects in planned development programmes for the surrounding Moscow region.

“This is a truly innovative product – a multi-layer pipe for special applications with non-erasable and non-flammable inner layers,” Gorilovsky commented on the ‘MULTIPIPE’ product.

A number of industrial enterprises are now interested in using such polymer pipes, “since they are 4 – 5 times more durable than other types of pipe”, the Polyplastic group president added.

Last year, the Klimovsk operation, one of Europe’s biggest PE pipe producers, extruded around 50,000 tons of polyethylene into pipes. This represented about one fifth of the total output in Russia, according to Polyplastic.

The group, which also extrudes polypropylene and PVC-U pipe, is not only the country’s biggest plastic pipe manufacturer but also Russia’s leading plastics processor.
MRC

MOSCOW (MRC) -- Russia's production of high density polyethylene (HDPE) totalled 486,400 tonnes in the first six months of 2019, down by 1% year on year. At the same time, only one of the four producers reduced its output, according to MRC's ScanPlast report.

June HDPE production in Russia was 78,300 tonnes, whereas this figure was about 88,900 tonnes a month earlier, Kazanorgsintez reduced its polyethylene (PE) production. Thus, overall HDPE output reached 486,400 tonnes in January-June 2019, compared to 491,400 tonnes a year earlier. Gazprom neftekhim Salavat, Kazanorgsintez's and Stavrolen's higher production could not offset the absence of the output at Nizhnekamskneftekhim.

The structure of PE production by plants looked the following way over the stated period.

Kazanorgsintez's total HDPE production dropped to 39,500 tonnes in June from 50,300 tonnes a month earlier, the Kazan producer reduced its output in favour of the linear low density polyethylene (LLDPE) production. The Kazan plant's overall HDPE output reached 268,800 tonnes in January-June 2019, up by 2.5% year on year.

Stavrolen produced 27,300 tonnes last month, which virtually corresponds to the May figure. The plant's overall output reached 154,200 tonnes over the stated period, up by 2% year on year.

Gazprom neftekhim Salavat produced 11,400 tonnes in June, compared to 10,500 tonnes a month earlier. The Baskhir plant's overall HDPE output reached 61,400 tonnes in the first six months of 2019, up 2% year on year.

Nizhnekamskneftekhim produced exclusively LLDPE over the stated period.

MRC

MOSCOW (MRC) -- Polypropylene (PP) imports into Russia slumped in the first six months of 2019 by 11% year on year to 86,800 tonnes.
The greatest decrease in imports accounted for homopolymer PP, according to MRC DataScope.

June PP imports into the Russian market decreased to 12,600 tonnes from 16,300 tonnes a month earlier, supply of homopolymer PP and PP block copolymers declined. In general, total PP imports into the country decreased to about 86,800 tonnes in January - June compared with 97,800 tonnes year on year. The volume of external purchases for all grades of polymers of propylene decreased, with the exception of PP block copolymers, with the most noticeably reduced imports of homopolymer PP.

Overall, the structure of PP imports by grades looked the following way over the stated period.

June imports of homopolymer PP decreased to 3,300 tonnes against 6,500 tonnes a month earlier, shipments of homopolymer PP raffia from Central Asia decreased several times. Thus, overall imports of homopolymer PP to Russia totalled 28,600 tonnes in the first six months of 2019, compared to 36,000 tonnes a year earlier.

June imports of PP block copolymers in Russia were about 4,300 tonnes against 5,100 tonnes in May on decreased demand for injection moulding PP. Imports of PP block copolymers into Russia reached 25,500 tonnes in January-June 2019, compared to 24,200 tonnes a year earlier.

June imports of PP random copolymers were about 2,000 tonnes versus 1,700 tonnes a month earlier, on increased volumes of film PP purchases. Total imports of propylene copolymers in Russia were 15,100 tonnes in January - June 2019, compared with 16,900 tonnes year on year.

Russia's imports of other polymers of propylene for the period were about 17,500 tonnes in the first six months of the year, compared with 20.600 tonnes year on year.


MRC

MOSCOW (MRC) -- Pennsylvania Governor Tom Wolf said that he did not support using taxpayer dollars to help save the Philadelphia Energy Solutions refinery complex from permanently closing, reported Reuters.

"The administration does not plan expending any funding to maintain the site as a refinery," Wolf spokesman J.J. Abbott said in a statement to Reuters, saying there were "significant challenges" to such a plan.

The refinery suffered a massive fire last month that prompted owners to seek to shut the plant and laying off about 1,000 people.

The lack of government support - both politically and financially - will likely dampen efforts to sell and restart the largest and oldest refinery on the US East Coast.

As MRC informed previously, the alkylation unit involved in a massive fire on 21 June at Philadelphia Energy Solutions Inc's oil refinery has been completely destroyed, which hampered the supply of gasoline from the US East Coast's largest refinery.
MRC