London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950
info@mrcplast.com

Our Clients

Order Informer

 
Home > News >
 

U.S. crude stockpiles unexpectedly drop for first time since January

May 15/2020

MOSCOW (MRC) -- U.S. crude oil stockpiles surprisingly fell last week, including at the Cushing, Oklahoma, storage hub, the first time supply has dropped since the coronavirus pandemic choked off fuel demand in the United States, reported Reuters.

Crude inventories USOILC=ECI fell 745,000 barrels in the week to May 8 to 531.5 million barrels, the U.S. Energy Information Administration said, compared with expectations in a Reuters poll for a 4.1 million-barrel rise. That was the first decline after 15 weeks of builds.

U.S. crude stockpiles have risen by more than 100 million barrels since mid-January, with builds accelerating in March as the coronavirus pandemic took hold and during a brief price war between Saudi Arabia and Russia. The drawdown this week was in part because imports fell to a record low at less than 2 million barrels per day, and U.S. production dropped.

Stocks in Cushing USOICC=ECI fell by 3 million barrels in the last week, EIA said. The hub, coming into this weeks data, is more than 80% full, as producers find themselves with fewer places to store oil.

Crude oil production dropped 300,000 bpd to 11.6 million bpd, its lowest since December 2018.

Fuel demand rebounded in the most recent week, though over the past four weeks still remains 23% below the year-ago average.

The pretty desperate picture weve seen because of the drop in demand, maybe we are seeing signs its beginning to thaw, said Gene McGillian, vice president of market research at Tradition Energy.

The market should take some heart from the numbers but we need to see more than one week of data.

Oil prices rallied briefly before returning to levels seen prior to the report. U.S. crude CLc1 futures were down 39 cents, or 1.5%, to USD25.38 a barrel while Brent dropped 2.1%, or 64 cents, to USD29.34 a barrel.

Net U.S. crude imports fell last week by 300,000 bpd in the last week, EIA said, to 1.9 million bpd - the lowest ever.

Refinery crude runs fell by 593,000 bpd in the last week, EIA said. Refinery utilization rates fell by 2.6 percentage points in the week to 67.9% of total capacity, not far from an all-time low.

U.S. gasoline stocks fell by 3.5 million barrels to 252.9 million barrels, the EIA said, compared with forecasts for a 2.2 million-barrel drop. Gasoline inventories have declined in recent weeks due to reduced refining activity.

While inventories of gasoline remain at or near the top of their five-year range, if this dynamic persists, I would expect the gasoline supply glut to diminish, said David Thompson, executive vice-president at Powerhouse, an energy-specialized commodities broker in Washington.

Distillate stockpiles, which include diesel and heating oil, rose by 3.5 million barrels in the week to 155 million barrels, versus expectations for a 2.9 million-barrel rise, the EIA data showed.

As MRC informed previously, global oil consumption cut by up to a third. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.

Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.

We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 557,060 tonnes in the first three month of 2020, up by 7% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments rose because of the increased capacity utilisation at ZapSibNeftekhim. Demand for LDPE subsided. At the same time, PP shipments to the Russian market was 267,630 tonnes in January-March 2020, down 20% year on year. Homopolymer PP and PP block copolymers accounted for the main decrease in imports.


mrcplast.com
Author:Margaret Volkova
Tags:Europe, PP, PE, LLDPE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, BASF, Borealis, BP Plc, LyondellBasell, Sabic, Total Petrochemicals, Russia, USA.
Category:General News
|
| More

Leave a comment

MRC help

 


 All News   News subscribe