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COVID-19 - News digest as of 01.06.2020

June 01/2020

1. Rosneft finds extended oil cuts painful

MOSCOW (MRC) -- Rosneft  does not have enough crude to ship to buyers with which it has long-term supply deals, making it hard for the Russian company to continue with record oil cuts beyond June, four sources familiar with the matter told Reuters. Rosneft has told the energy ministry it would be difficult to maintain cuts to the end of the year, as it has had to cut shipments to major buyers, such as Glencore and Trafigura, despite good demand, two sources close to the talks said on condition of anonymity. "There is no doubt Rosneft will strictly fulfil all obligations under supply contracts with its foreign and Russian counterparties despite output cuts made by the company as a part of OPEC+ deal, Rosneft CEO Igor Sechin said in a statement on Friday. Glencore and Trafigura declined to comment. Russias Energy Ministry did not respond to Reuters request for comment. President Vladimir Putin, who decides on oil policy, spoke with Saudi Crown Prince Mohammed bin Salman on Wednesday about close coordination on output cuts, agreed in April to tackle oil market weakness because of the coronavirus pandemic.

http://www.mrcplast.com/news-news_open-371334.html

2. Marathon Galveston Bay, Texas, refinery shuts HCU, alky unit for work

MOSCOW (MRC) -- Marathon Petroleum Corp shut the hydrocracker (HCU) and alkylation unit at its 585,000 barrel-per-day (bpd) Galveston Bay Refinery in Texas City, Texas, as part of a multi-unit overhaul that began on Saturday, said sources familiar with plant operations, said Hydrocarbonprocessing. Marathon spokesman Sid Barth declined to comment. The 60,000-bpd hydrocracker, called Ultracracker 4, and 31,500-bpd alkylation unit were shut along with a sulfur recovery unit and a 47,500-bpd aromatics recovery unit, the sources said. The first units shut were the 65,000-bpd Ultraformer, as the reformer is called, a 60,000-bpd residual oil hydrotreater and an aromatics unit, the sources said. The first shutdowns began on Saturday. The overhaul is expected to be completed as early as mid-July but may extend through Aug. 1. Because of the COVID-19 pandemic, the overhaul has twice been delayed from an initial start date scheduled in late March.

http://www.mrcplast.com/news-news_open-371335.html

3. US crude, diesel stocks pile up on lackluster fuel demand

MOSCOW (MRC) -- US crude oil and distillate inventories rose sharply last week, the Energy Information Administration said, while fuel demand remained slack even as various states eased movement restrictions that were put in place to stem the coronavirus pandemic, reported Reuters. Crude inventories posted a gain of 7.9 million barrels in the week to May 22, largely due to imports. That brought overall US stocks, excluding strategic reserves, to 534.4 million barrels, about 1 million barrels away from an all-time record. Analysts expected stocks to fall by 1.9 million barrels.

http://www.mrcplast.com/news-news_open-371356.html

4. Flurry of US crude export fixtures offers glimmer of hope

MOSCOW (MRC) -- A flurry of tentative bookings to export US crude oil from the Gulf Coast suggests demand is edging up after the coronavirus slammed energy consumption worldwide, reported Reuters. BP, Trafigura and Equinor have all tentatively fixed vessels this past week to carry US crude to global destinations over the coming month, according to Refinitiv Eikon data and shipping sources.

http://www.mrcplast.com/news-news_open-371358.html

5. Braskem lowers production of ethylene in Brazil, PP in the US on drop in demand

MOSCOW (MRC) -- Braskem has given an update on the impact that the coronavirus disease 2019 (COVID-19) pandemic is having on the company and measures it is taking to tackle current challenges, said CHemweek. It has reduced staffing levels at its facilities to the minimum and cut by 50% the number of industrial workers and contractors at its sites. The company says that plant utilization rates in Brazil and the US were reduced in response to lower demand and inventory effects in the petrochemical and plastics production chain.

http://www.mrcplast.com/news-news_open-371315.html

6. Saudi Arabia takes steps to revive economic growth stalled by pandemic, oil price crash

MOSCOW (MRC) -- Saudi Arabia, the world's largest crude exporter, has taken steps to revive economic growth hurt by the COVID-19 pandemic and oil price crash, including making an unprecedented transfer of government funds to the sovereign wealth fund, reported S&P Global. The country's economy has been severely hit this year. Saudi Arabia's budget for 2020, announced in December, assumed an oil price of USD60/b, and the country's fiscal breakeven price is USD80/b, according to the International Monetary Fund. That compares with a front-month Brent crude price of USD37.84 at the end of May.

http://www.mrcplast.com/news-news_open-371364.html

7. Producers turn to hedging as shelter against oil market turmoil

MOSCOW (MRC) -- US shale oil producers have moved in droves during the last couple of months to protect themselves from current market turmoil by hedging, using a variety of derivative instruments to protect against exposure to volatile oil prices, according to S&P Global. As crude prices plunged from low demand as the coronavirus pandemic ravaged the globe, producers cut 2020 capital budgets in half and released huge numbers of drilling rigs. They also shut-in their lower-margin production. Many also used a variety of contractual arrangements to assure their oil and gas output and therefore, their revenues weren't roughed up too badly during a period of dismally low oil prices and near-term cloudy visibility.

http://www.mrcplast.com/news-news_open-371367.html


mrcplast.com
Author:Margaret Volkova
Tags:PP, shale gas, crude and gaz condensate, ethylene, petrochemistry, Rosneft, BP Plc, Braskem, Marathon, COVID-19, Brazil, Rossiya, Saudi Arabia, USA.
Category:General News
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