UAE pumped 2.4 million b/d in May in line with its OPEC+ quota

MOSCOW (MRC) -- The UAE, OPEC's third-largest oil producer, pumped 2.4 million b/d in May, in line with its 2.446 million b/d OPEC+ quota as members within the 23-member alliance began a historic output curb, a source familiar with the matter told S&P Global on Sunday.

The UAE, which pumped a record 4.1 million b/d in April, has also pledged to trim an extra 100,000 b/d in June, on top of its OPEC+ commitments, as it joins Saudi Arabia's 1 million b/d additional curb and Kuwait's 80,000 b/d cut in attempts to help rebalance global oil markets.

The UAE turned up the taps in April after the breakdown of OPEC+ talks in early March, prompting the start of a price war between Saudi Arabia and Russia that flooded the market with crude. The oil deluge, which caused a price crash, led the OPEC+ coalition to an historic agreement to cut output starting in May and June with a 9.7 million b/d cut, with gradual easing of curbs through to April 2022.

OPEC+ ministers are considering moving up their meeting to June 4 instead of the previously scheduled June 9-10 so that July nominations can factor in any changes to oil production quotas, people familiar with the discussions told Platts on Saturday.

Holding the meeting that early would preclude any May production data from OPEC's six secondary sources, including Platts, from factoring into a decision. But nominations for term volumes by Saudi Arabia and other key OPEC members are typically announced by the first week of the preceding month.

As MRC wrote previously, UAE's ADNOC is keeping a beat ahead of the OPEC+ members by ensuring customers of its crude oil in Asia of sufficient supplies as demand for Middle East sour crude returns, market sources told S&P Global. The announcement came unexpectedly early, said a crude trader based in Singapore, adding that "buyers have not even nominated volumes yet."

We remind that in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- Crude oil futures were largely steady during mid-morning trade in Asia on June 5 as the market looks towards fresh supply cues from OPEC+, with uncertainty lingering over the upcoming meeting, said S&P Global.

At 10:35 am Singapore time, ICE Brent August crude futures was 6 cents/b (0.15%) lower from the settle on June 4 at USD39.93/b, while the NYMEX July light sweet crude contract was 13 cents/b (0.35%) lower at USD37.28/b.

Investors are still awaiting further clarity on the OPEC+ talks, which have yet to be scheduled on a fixed date. Talks have been bogged down over quota compliance, with Saudi Arabia insisting on firm commitments from other OPEC+ members to stick to their production quotas.

"The primary point of contention is centered on Iraq and Nigeria's long-standing non-compliance to virtually all of OPEC+ production deals," AxiCorp's chief global markets strategist Stephen Innes said in a June 5 note.

Saudi Arabia and Russia have been seeking guarantees from Iraq and other members such as Nigeria and Kazakhstan, to adhere to quotas and compensate for overproduction with deeper cuts in the coming weeks, Platts reported.

The deal to extend the alliance's hefty 9.7 million b/d production cut agreement through at least July still hangs on a balance for now, keeping sentiment uncertain. "The growing fear is that not only will a deal to extend the deep cuts not be reached, but producers may even relax their current over-compliance," ANZ analysts said in a June 5 note.

Sentiment was also weighed by stubbornly weak demand in the US, ANZ analysts added, citing the swell in gasoline inventories based on EIA data released on June 3. In recent US-China developments, China said on June 4 that it will ease restrictions on international air travel, hours after the US threatened to bar passenger flights from China from June 16, according to media reports.

Ethylene and propylene are feedstocks for producing PE and 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) -- Imports of bottle grade polyethylene terephthalate (PET) in Ukraine increased by 8% year on year to 51,500 tonnes in the four months of the year from 47,800 tonnes a year earlier, according to MRC's DataScope report.

April imports amounted to 16,600 tonnes, 26% more than the previous month. External supplies of material were at the level of 14,100 tonnes in April last year. The volume of supplies of bottle grade PET from China to Ukraine over the fur months of the year fell almost three times: from 36,400 tonnes in January-April 2019 to 12,200 tonnes.

Nevertheless, the supply of Chinese PET chips to the Ukrainian market almost almost doubled in April and amounted to 5,500 tonnes compared to 2,900 tonnes a month earlier, compared to April last year, imports decreased by 45%. The share of imports from China in the total volume amounted to 33% in April against 22% a month earlier and 21% in April 2019.

The share of Chinese material decreased from 76% in the first four months of last year to 24%. The key suppliers of injection moulding Chinese PET chips to the Ukrainian market were producers Dragon, China Resources Chemicals and Yisheng Petrochemical.

At the same time, import of injection moulding PET chips from Lithuania grew three times in the four months of this year and amounted to 30,900 tonnes. This figure was at 10,100 tonnes in January- April 2019. The volume of foreign deliveries from Lithuania to Ukraine increased by 23% in April compared to March to 8,900 tonnes against 7,200 tonnes. In April of the previous year, imports of PET chips were 4,000 tonnes.

The volume of Lithuanian imports to the country in the total supply volume increased to 60% in he first four months of this year against 21% in January - April 2019. The main supplier of Lithuanian material is the manufacturer Neo Group (30,800 tonnes). The main buyers of Lithuanian bottled PET were Coca-Cola Beverages Ukraine Limited and Retal.

MRC

MOSCOW (MRC) -- A Minnesota pollution regulator said that it will hold a public hearing this summer on Enbridge Inc’s plan to replace its Line 3 oil pipeline, adding a potential two-month delay and pushing the bulk of construction to next year, according to Hydrocarbonprocessing.

The Minnesota Pollution Control Agency (MPCA) said the hearing will focus on how Enbridge intends to protect streams and wetlands that the pipeline crosses.

As MRC wrote previously, in late December 2019, Enterprise Products Partners and Enbridge agreed to jointly develop a deepwater crude oil export terminal offshore Houston, the latest sign of consolidation in the crowded field of US Gulf Coast export projects.

We also remind that Enterprise Products Partners' Mont Belvieu propane dehydrogenation unit in Texas restarted from planned maintenance in the first week of December, 2019. The PDH unit went offline for maintenance on November 13. That day, the company said in a filing with the Texas Commission on Environmental Quality that the RAC "B" turbine shut down, which resulted in flaring. The flaring was estimated to last 72 hours. The unit has a capacity of 750,000 mt/year, according to Platts data.

Propylene is the main feedstock for producing polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC

MOSCOW (MRC) -- China Petroleum & Chemical Corp (Sinopec) said its daily sales of refined oil products have resumed to more than 90% of levels seen before the coronavirus outbreak, after it announced the worst quarterly loss on record a day earlier, reported Reuters.

Diesel sales match the level of a year ago, while sales of gasoline have rebounded to 90% and petrochemical products to 86%, of the levels seen last year.

“Fuel and chemical products consumption is expected to further improve with the acceleration of production resumption at companies in China. Supply and demand will be balanced again,” the company said in a statement.

The listed branch of Sinopec on reported a 19.782 billion yuan (USD2.80 billion) net loss in first-quarter earnings under Chinese accounting standards, as the coronavirus pandemic walloped fuel consumption and led to collapsing oil prices.

That was the state-owned oil company’s first quarterly loss since the fourth quarter of 2014 and was the biggest quarterly loss since it went public in 2003, according to Refinitiv Eikon’s records.

The loss compared with net profits in the first quarter of 2019 of 14.76 billion yuan and 14.31 billion yuan in the fourth quarter last year.

Sinopec said its refinery throughput fell 13% year-on-year to 53.74 million tonnes, or about 4.31 million barrels per day (bpd), as the coronavirus curtailed demand for refined oil products.

Its oil refining sector suffered a 25.8 billion yuan loss in the first three months of 2020.

The company said last month it expected lower refining runs for the full year of 2020, but for refined oil consumption to return to normal in the third and fourth quarters.

Utilisation rates at its refineries have been resuming after touching as low as 66% in February.

Crude oil production in the first quarter at Sinopec dipped 0.2% from a year earlier to 70.65 million barrels, while natural gas output fell 2.4% to 249.68 billion cubic feet.

Its realised crude oil prices were USD49.15 per barrel, down 14.8% on year, following the drop in global oil prices triggered by a price war between Saudi Arabia and Russia.

Realised natural gas prices were USD6.43 per thousand cubic feet, down 9.2% from a year ago, it reported.

As MRC informed earlier, Sinopec Corp is expected to start commercial operations at its oil refining and petrochemical complex in Zhanjiang at the end of July. The refinery is capable of processing 200,000 barrels per day (bpd) of crude oil and the petrochemical plant will produce 800,000 tonnes per year of ethylene. The project, with first phase investment of 40 billion yuan ($5.59 billion), is located in southern China’s Guangdong province. The refinery received its first crude oil cargo of 128,900 tonnes from a very large crude carrier (VLCC) that arrived at the plant’s 300,000-tonne capacity berth in early May, Sinopec said on May 9.

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

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC