Crude oil prices were generally lower in 2019 than in 2018

MOSCOW (MRC) -- The price of Brent crude oil, the international benchmark, averaged USD64 per barrel (b) in 2019, USD7/b lower than its 2018 average. The price of West Texas Intermediate (WTI) crude oil, the U.S. benchmark, averaged USD57/b in 2019, USD7/b lower than in 2018, said Hydrocarbonprocessing.

Compared with recent years, both crude oil prices traded within relatively narrow price ranges throughout the year. Brent prices reached an annual daily low of USD55/b in early January, rising to a daily high of USD75/b in late April. The resulting range of USD20/b is the narrowest since 2003. WTI prices ranged from USD47/b to USD66/b.

More recently, crude oil prices have increased following the January 3 U.S. military operation in Iraq, likely reflecting an increase in geopolitical risk.

Although the 2019 range of daily prices remained relatively narrow, Brent and WTI front-month futures prices did experience their largest single-day price increases since 2008. On Monday, September 16, 2019, the first full day of trading after an attack on key energy installations in Saudi Arabia, Brent and WTI crude oil prices increased by USD9/b and USD8/b, respectively. The price increases were relatively short lived, and prices returned to pre-attack levels by the end of the month because of Saudi Arabia’s ability to bring production back online within weeks of the attack and global concerns about demand growth.

Throughout 2019, increases in U.S. petroleum production put downward pressure on crude oil prices. In addition, the production increases likely limited the effect on prices from the attack on Saudi Arabia, production cut announcements from the Organization of the Petroleum Exporting Countries (OPEC), and U.S. sanctions on Iran and Venezuela that limited crude oil exports from those countries.

Outside the United States, crude oil production from major producers such as Saudi Arabia, Venezuela, and Iran declined in 2019. EIA expects that total OPEC crude oil production averaged 29.8 million b/d in 2019, a decline from the 2018 average of 32.0 million b/d. U.S. crude oil imports from OPEC countries were at their lowest level in several decades. To continue limiting excess crude oil supply, on December 7, 2019, OPEC+ (OPEC plus 10 other nations such as Russia, Mexico, and Kazakhstan) announced they were deepening the production cuts originally announced in December 2018.

Based on the U.S. Energy Information Administration’s (EIA) monthly data through October and short-term forecasts for November and December, 2019 will likely be a record year for several U.S. crude oil and petroleum metrics. EIA expects that U.S. crude oil and other liquids production will reach an annual average of 19.6 million barrels per day (b/d), the highest level on record. EIA also expects U.S. crude oil production will average 12.3 million b/d in 2019, making the United States the largest crude oil producer in the world.

In its December Short-Term Energy Outlook, EIA expects U.S. crude oil and petroleum product net imports will average 490,000 b/d in 2019, down from 2.3 million b/d in 2018. In September and October, the United States exported more petroleum (crude oil and products) than it imported for the first time on record, based on monthly values since 1973. EIA’s monthly data through December 2019 will be available by the end of February 2020.
MRC

MOSCOW (MRC) -- US coatings and materials company PPG has reached a definitive agreement to acquire Industria Chimica Reggiana (ICR), an Italian manufacturer of paints and coatings for the automotive refinish and light industrial coatings industries, said Businessinsider.

“PPG’s acquisition of ICR will complement our current product offering for the automotive refinish and light industrial coatings industries and add specialised, value-added products that address the needs of distributors and body shops,” said Gary Danowski, PPG vice president, global automotive refinish.

The deal is expected to close in the first quarter 2020. Financial terms were not disclosed.

As MRC informed earlier, Russia's output of chemical products dropped by 3.2% in November 2019 month on month.
However, production of basic chemicals increased by 3.6% in the first eleven months of 2019, according to Rosstat's data. According to the Federal State Statistics Service of the Russian Federation, the largest increase in production volumes on an annualized basis accounted for mineral fertilizers and polymers in primary form. Last month, 255,000 tonnes of ethylene were produced versus 210,000 tonnes in October; by November, Russian producers had completed all their scheduled works. Thus, 2,721,000 tonnes of this olefin were produced in January-November 2019, up by 0.3% year on year.

ICR manufactures automotive refinish products, including putties, primers, basecoats and clear coats. It also makes a range of coatings, enamels and primers for light commercial vehicles and other light industrial coatings applications. ICR employs about 180 people and sells its products in more than 70 countries in Europe, Africa, the Middle East, the US and Latin America.
MRC

MOSCOW (MRC) -- Enterprise Products Partners and Navigator Holdings confirmed that a first cargo of ethylene has been exported from their 50/50 joint venture marine terminal at Morgan’s Point, Texas, on the Houston Ship Channel, said the producer.

The "Navigator Europa" recently departed the facility carrying 25m pounds (11,300 tonnes) of ethylene for Japanese trading company Marubeni, Enterprise said in statement. Latest shipping data shows the vessel at the Panama Canal:

The first cargo had been earmarked to load in H2 December, according to European market sources, likely heading to Asia. There was also unconfirmed talk that the next ethylene shipment to load would be in February on the vessel the Happy Albatross, potentially for a European receiver.

The new terminal features two docks and the capacity to load 2.2bn lb/year (1m tonnes/year) of ethylene. A refrigerated storage tank for 66m pounds of ethylene is also being built on-site and will increase the capability to load ethylene up to a rate of 2.2m lb/hour.

Tank construction is expected to be completed in the fourth quarter of 2020, Enterprise said.The export terminal is pipeline-connected to Enterprise’s Mont Belvieu, Texas complex, where the company is in the process of commissioning a high-capacity ethylene salt dome storage well with a capacity of 600m pounds.

The terminal, expected to reach full operations by the fourth quarter of 2020, should help ease US ethylene oversupply by connecting it to overseas demand. Enterprise has designed the system to serve as an open market storage and trading hub for the ethylene industry through storage, connections to multiple ethylene pipelines and high-capacity export capabilities, it said.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.Enterprise Products Partners L.P. is one of the largest publicly traded partnerships and a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil, refined products and petrochemicals.

Navigator Holdings Ltd. is the owner and operator of the world’s largest fleet of handysize liquefied gas carriers and a global leader in the seaborne transportation of petrochemical gases, such as ethylene and ethane, liquefied petroleum gas (“LPG”) and ammonia.
MRC

MOSCOW (MRC) -- CPC Corporation plans to resume operations at one of its naphtha crackers in Taiwan by around mid-January 2020 after major maintenance works, reported CommoPlast with reference to market sources.

The cracker number 4 was shut on 8 November 2019 and was expected to remain offline for about 65 days.

The No. 4 unit has an annual capacity of 380,000 tons/year of ethylene and 193,000 tons/year of propylene. The shutdown would result in a production loss of 67,671 tons of ethylene and 34,370 tons of propylene.

Sources added that for December 2019 contract, CPC was to fulfill only 85% of the volume due to the shutdown.

As MRC informed earllier, CPC Corporation took its No. 4 cracker off-line in mid-November 2017 owing to technical issues and resumed its operations in late January, 2018. Located in Linyuan, Taiwan, the cracker has an ethylene capacity of 380,000 mt/year and propylene capacity of 193,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,904,410 tonnes in the first eleven months of 2019, up by 6% year on year. Shipments of all PE grades increased. PE shipments increased from both domestic producers and foreign suppliers. The PP consumption in the Russian market was 1,161,830 tonnes in January-November 2019, up by 7% year on year. Deliveries of all grades of propylene polymers increased, with the homopolymer PP segment accounting for the largest increase.

CPC Corporation, Taiwan, is engaged in the exploration, production, refining, procurement, transportation, storage, and marketing of oil and gas. The company provides fuel oil, including automotive unleaded gasoline and diesel fuel, low-sulfur fuel oil, marine distillate fuels, marine residual fuels, and aviation fuel; petrochemicals, such as ethylene, propylene, butadiene, benzene, para-xylene, and ortho-xylene; liquefied petroleum gas products comprising liquefied petroleum gas, propane, butane, and a propane/butane mixture; lubricants, motor oil, industrial oil, grease, and marilube oil; SNC products, including petroleum ether, naphtha, toluene, xylene, crude octene, methyl alcohol, normal paraffin, viscosity-graded asphalt cement, and sulfur; and natural gas.
MRC

MOSCOW (MRC) -- US crude stocks, gasoline and distillate inventories rose last week, reported Reuters with reference to the Energy Information Administration's statement.

Crude inventories rose by 1.2 million barrels in the week ended Jan. 3 to 431.1 million barrels, compared with analysts’ expectations in a Reuters poll for a 3.6 million-barrel drop.

Crude stocks at the Cushing, Oklahoma, delivery hub fell by 821,000 barrels in the last week, EIA said.

Refinery crude runs fell by 386,000 barrels in the last week, EIA said. Refinery utilization rates fell by 1.5 percentage points, in the week.

US gasoline stocks rose by 9.1 million barrels in the week to 251.6 million barrels, the EIA said, compared with expectations in a Reuters poll for a 2.7 million-barrel rise.

Distillate stockpiles, which include diesel and heating oil, rose by 5.3 million barrels in the week to 139 million barrels, versus expectations for a 3.9 million-barrel rise, the data showed.

Net US crude imports rose by 1.78 million barrels in the last week, EIA said.
MRC