US crude stocks surge by a record 19 million barrels

MOSCOW (MRC) -- US crude oil stockpiles rose by 19 million barrels last week, the biggest one-week increase in history, the US Energy Information Administration said, as refiners throttled back activity due to slumping demand as a result of the coronavirus pandemic, reported Reuters.

The build in the week to April 10 was much larger than the Reuters poll calling for a 11.7 million-barrel rise and offsets some of the optimism that had bloomed as a result of a worldwide pact between oil producers to cut output sharply. Crude futures slumped on the news.

"Even though we knew it was going to be bad, it’s worse than people thought," said Phil Flynn, an analyst at Price Futures Group in Chicago. "You look at gasoline demand and it’s pathetic. If you were going to write a nightmare report about petroleum, this is it."

Worldwide fuel demand has dropped by roughly 30% as businesses have shuttered, and residents avoid public gatherings and travel due to the pandemic, which has killed more than 130,000 people and infected 2 million. Most US states have issued orders asking people to stay at home; gasoline demand over the last four weeks has dropped by 32% from the year-ago period, EIA said.

Refiners have responded by cutting crude purchases and processing; they were operating at 69% of capacity nationwide, their lowest since September 2008, and their actions to counter weak demand is rippling through pipeline companies and oil producers. The latter are being forced to cut production, as some pipeline companies have said they cannot ship oil unless it has a proven destination.

Storage, meanwhile, continues to fill. Crude stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose by 5.7 million barrels last week, the EIA said, and now total 55 million barrels. The hub has about 76 million barrels of capacity, and could be full by mid-May, pipeline companies have said.

Crude prices dropped on the news, with US crude down 2.3% to USD19.69 a barrel as of 10:48 a.m. ET (1448 GMT) and Brent down 6.8% to USD27.60 a barrel.

Refinery crude runs fell by 969,000 barrels per day (bpd) in the last week, EIA said. Refinery utilization rates fell by 6.5 percentage points on the week.

US gasoline stocks rose by 4.9 million barrels in the week to record high at 262.2 million barrels, the EIA said, compared with expectations for a 6.4 million-barrel rise.

Distillate stockpiles, which include diesel and heating oil, rose by 6.3 million barrels in the week to 129 million barrels, versus expectations for a 1.4 million-barrel rise, the EIA data showed.

Net US crude imports fell last week by 797,000 bpd last week, EIA said.

As MRC informed preivously, Exxon Mobil Corp operates it 502,500 barrel-per-day Baton Rouge, Louisiana, refinery at low capacity utilisation as poor demand has pushed up inventories and filled storage tanks. The number of contract workers at the Baton Rouge refinery was cut by 1,800 people as Exxon begun informing service companies of planned spending cuts. The refinery’s production was cut to about 440,000 bpd, the sources said.

We remind that in September 2019, ExxonMobil announced plans to spend GBP140 million over the next two years in an additional investment program at its Fife ethylene plant, which has a capacity of more than 800,000 t/y.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.

ExxonMobil is the largest non-government owned company in the energy industry and produces about 3% of the world's oil and about 2% of the world's energy.
MRC

MOSCOW (MRC) -- SIBUR, Russia’s largest integrated petrochemicals company, and Netkanika, a major manufacturer of high-quality nonwoven materials, agreed to expand cooperation to provide the healthcare industry with high quality single-use personal protective equipment, said the company.

SIBUR undertakes to deliver the polypropylene grade for medicinal and hygienic use in the quantities required to fully utilise Netkanika’s capacities. This grade is perfectly suited for the production of nonwoven fabric, which is light-weight and low density (g/cm2), and at the same time durable, soft and air permeable. End products made of polypropylene-based multilayer nonwowen fabrics are characterised by a high bacterial filtration rate, air permeability and fluid resistance. Polypropylene for medicinal and hygienic use is produced at several SIBUR’s sites, including ZapSibNeftekhim.

Netkanika has quickly adjusted its production lines and production plan to maximise the output of materials used for disposable personal protective equipment such as medical masks and overalls for hospital workers.

The companies are also considering the ways to expand Netkanika’s production capacities to meet current and future demand in the healthcare industry. As part of this initiative, the partners are negotiating a long-term cooperation programme providing for SIBUR's supply of feedstock to Netkanika on favourable terms in order to speed up the potential return on investment.

Sergey Komyshan, member of the Management Board and Executive Director at SIBUR, said: "In response to the shortage of single use personal protective equipment in the market amid the pandemic we are prepared to diversify our product range to the maximum extent possible, increase the output of polypropylene grades for medical products, and boost supplies to manufacturers serving the healthcare industry. It is important to note that, apart from serving as components of protective medical devices, SIBUR’s polymers and organic synthesis products (such as polypropylene, polyethylene, PET, PVC and ethylene oxide) are widely used for the production of test tubes, drips, blister packs, disinfectants, and medical equipment. Therefore, supplying the healthcare sector is our priority.”

Rifkat Galimzyanov, General Manager of Netkanika, said: "Today, we are entirely focused on providing a steady supply of nonwoven materials to our clients that manufacture disposable personal protective equipment, including medical masks and wear, baby and adult hygiene products. Due to a demand spike there is a shortage of such materials in the market, which we are prepared to mitigate by engaging additional production capacities."

As MRC informed earlier, in connection with the coronavirus pandemic, ZapSibNeftekhim (part of SIBUR Holding) has increased the production of polypropylene grades that are used in the manufacture of non-woven medical masks, blisters for medicines, medical equipment, supplies, and packaging.

According to MRC's DataScope, ZapSibNeftekhim produced about 38,000 tonnes of polypropylene in February versus 40,900 tonnes in January. In the first two months of this year, the total output amounted to 78,900 tonnes.

MRC

MOSCOW (MRC) -- A leak in a pipeline that carries oil from U.S. Gulf of Mexico offshore facilities has halted production at two fields, Exxon Mobil Corp and Royal Dutch Shell said, as per Hydrocarbonprocessing.

Shell said it temporarily halted production on its 100,000-barrel-per-day deepwater Perdido production hub last Thursday after a subsurface leak was discovered on Exxon’s Hoover Offshore Oil Pipeline System (HOOPS). Production on Exxon’s Hoover platform also was halted because of the leak, Exxon said.

The HOOPS pipeline has been closed for repairs, a spokeswoman for Shell said. Exxon has notified government agencies and shippers and has responded to an onshore release of crude oil at a facility in Freeport, Texas, spokesman Todd Spitler said on Monday.

"We anticipate resuming flow on the line in a timely manner once it is safe to do so,” he said. Exxon did not say what caused the leak or how much production was affected.

HOOPS connects the Exxon-operated Hoover, Marshall and Madison offshore fields, which combined produce about 4,000 barrels of oil per day, according to a 2018 marketing brochure.

Shell’s Perdido hub is moored in some 8,000 feet (2,438 m) of water about 200 miles (322 km) south of Galveston, Texas, and is a joint venture among Shell, BP Plc and Chevron Corp .

The 153-mile (246-km) HOOPS pipeline brings oil from several offshore oilfields to the Quintana Terminal near Freeport, according to an Exxon website.

As MRC informed earlier, Exxon Mobil Corp operates it 502,500 barrel-per-day Baton Rouge, Louisiana, refinery at low capacity utilisation as poor demand has pushed up inventories and filled storage tanks. The number of contract workers at the Baton Rouge refinery was cut by 1,800 people as Exxon begun informing service companies of planned spending cuts. The refinery’s production was cut to about 440,000 bpd, the sources 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 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
MRC

MOSCOW (MRC) -- Krasnoyarsk Synthetic Rubber Plant plans to launch production of synthetic nitrile butadiene rubber latex for technical and diagnostic exam gloves, said the company.

By the end of 2020, SIBUR’s Krasnoyarsk site plans to start commercial production of synthetic nitrile butadiene rubber (NBR) latex with an annual capacity of 3.5 kt. The project aims to develop a feedstock base for import substitution of technical and diagnostic exam (including medical) gloves through localisation of production in Russia. This is particularly important in the times when the coronavirus wreaks havoc across the globe and there is an acute shortage of disposable personal protection equipment. The strong demand for this type of products will not only help ramp up latex output, but also enable Russian manufacturers to provide a stable supply of technical and diagnostic exam gloves. The impressive capacity of the new production site will make it possible for processing companies (provided this industry gains momentum) to churn out some 230 million exam gloves per year.

Сarboxylated nitrile butadiene rubber latex is used to manufacture technical and diagnostic exam gloves. The new product is hypoallergenic and highly resistant to aggressive environments, which makes it the perfect option for manufacturing gloves.

For several years, a cross-functional team of experts from the Elastomers R&D Centre in Voronezh, NIOST (SIBUR's corporate scientific centre) and the production site’s R&D and test centre, has been developing the NBR latex formula. The developers performed a benchmark analysis and produced laboratory prototypes of latex, with the new product tested by the technical teams of Russian and international glove manufacturers. Efforts to improve the formula will continue going forward.

Petr Kazakov, CEO of Krasnoyarsk Synthetic Rubber Plant, commented: "The launch and successful marketing of the Krasnoyarsk site’s new product will set the stage for the development of the latex manufacturing industry in the years to come. Today our production site remains fully focused on the investment project designed to support domestic manufacturers. By fighting off competition from international companies offering products that are hard to find in the Russian market, SIBUR does not only deliver on the import substitution strategy, but also significantly extends its product range and promotes deep hydrocarbon feedstock processing, with our existing and potential customers benefiting from high quality products and long-term collaboration. The new product opens up opportunities for partnership projects with industry leaders both in Russia and all across the globe."

As MRC informed earlier, in connection with the coronavirus pandemic, ZapSibNeftekhim (part of SIBUR Holding) has increased the production of polypropylene grades that are used in the manufacture of non-woven medical masks, blisters for medicines, medical equipment, supplies, and packaging.

According to MRC's DataScope, ZapSibNeftekhim produced about 38,000 tonnes of polypropylene in February versus 40,900 tonnes in January. In the first two months of this year, the total output amounted to 78,900 tonnes.

MRC

MOSCOW (MRC) -- Based on the results of operations in the 1st quarter 2020, Gazprom neftekhim Salavat ramped up its stable gas condensate throughput and production output, said Marketscreener.

The throughput performance of stable gas condensate during the 1st quarter 2020 (1 502 thousand tons) has grown by 15.7% at the Company’s Oil Refinery, as compared to the same period last year (1 298.5 thousand tons) due to increases in supplies.

Beneficial market conditions as well as the change in the processed feed structure to gas condensate allowed to step up motor gasoline output (346.9 thousand tons) in the 1st quarter by 11.9%, relative to the same period last year (310.1 thousand tons).

Since the start of the year, the Company’s diesel fuel output (577.2 thousand tons) has been raised by 44.4%, compared to the same period last year (399.8 thousand tons).

The increased share of gas condensate in the total feed stock volume as well as its structural optimization contributed to substantial growth of light petroleum products yield by 6.5%.

The actual output of ethylene (97,8 thousand tons) has grown by 2.9% for the 1st quarter of this year at the Monomer plant, relative to the same period last year (95,0 thousand tons).

Qualitative change in the feed structure and in the pyrolysis mode allowed to increase the yield of butylene-butadiene cut (27.3 thousand tons) by 3.7 %, as compared to the same period last year (26.3 thousand tons). Since the beginning of the year, the actual yield of benzene (43.2 thousand tons) ramped up by 13.5%, relative to the same period last year.

Increased sales at the Gas & Chemical Plant contributed to higher urea output (182.9 thousand tons) in the 1st quarter 2020. It grew by 4.9%, compared to the same period last year (174.4 thousand tons).

It was previously reported that Gazprom Neftekhim Salavat (STS), one of the largest Russian petrochemical producers, plans to start scheduled repairs of acrylate production on April 20. This production will be closed until May 30.

Gazprom neftekhim Salavat is one of the largest oil refining and petrochemical complexes in Russia. The Complex was founded in 1948. The Company is integrated into the Gazprom system. It has the basic advantage, consolidating on a single site a full cycle of crude hydrocarbons processing, petrochemistry and mineral fertilizers production. The Company comprises the Oil Refinery, Gas & Chemical Plant and the Monomer Plant.

Gazprom neftekhim Salavat produces more than 100 items, over 50% of which are bulk products including motor gasoline, diesel fuel, fuel oil, styrene, polystyrene, low density polyethylene, high density polyethylene, DOP plasticizer, butyl alcohols, sulphur, ammonia, urea, acrylic acid, butyl acrylate etc. The oil refining and petrochemical products are exported to all the federal subjects of the country. The export reach covers over 50 CIS and non-CIS countries including Finland, China, Brazil, the UK, Western Europe countries and the Baltic states.
MRC