Oil rises on US jobless drop, OPEC+ meeting hopes

MOSCOW (MRC) -- Oil prices rose on Friday after an unexpected fall in the monthly US jobless rate and OPEC’s decision to bring forward to Saturday discussions on whether to extend record production cuts, reported Reuters.

Brent crude futures were up USD2.40, or 6.0%, at USD42.39 a barrel as of 1243 GMT. US West Texas Intermediate (WTI) crude futures rose USD2.05, or 5.48%, to USD39.46 a barrel.

The US Labor Department showed a surprise fall in the jobless rate to 13.3% last month from 14.7% in April.

Brent has risen 17% since Friday to reach a three-month high, settling in a range more comfortable for producers like Russia. The contract has more than doubled since it crashed to as low as USD15.98 a barrel on April 22.

WTI is up 11% from last Friday’s close, leaving benchmarks on track for a sixth week of gains, lifted by the output cuts and signs of improving fuel demand as countries ease lockdown measures imposed to prevent the spread of the new coronavirus.

Russia’s energy ministry said on Friday a video conference of a group of leading oil producers, known as OPEC+, would be held on Saturday.

The market was hopeful that some laggard countries may have agreed to align themselves with the deal.

OPEC+ had said they would bring forward the meeting, which had been scheduled for next week, should Iraq and others agree to boost their adherence to existing supply cuts.

“Prices are up with the meeting scheduled for tomorrow. There was lots of confusion ... so it looks like they found a way forward,” Olivier Jakob at Petromatrix consultancy said.

Two OPEC+ sources said Saudi Arabia and Russia had agreed to extend the deeper cuts until the end of July but said Riyadh was also pushing to extend them until the end of August.

If OPEC+ fails to agree to roll over the current output curbs, that would mean the cut could drop back to 7.7 million bpd from July through December as previously agreed.

Adding support was the first tropical storm of the season in the US Gulf of Mexico. Storm Cristobal is expected to enter the central Gulf this week, an area rich with offshore platforms, and could see landfall along Louisiana’s refinery row on Sunday.

US energy companies have already closed some production. “It’s not big, but there will be some shut-ins,” Jakob said.

As MRC informed previously, global oil consumption cut by up to a third in Q1 2020. 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 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) -- As oil and gas companies began shutting offshore production before the first tropical storm of the season in the US. Gulf of Mexico, experts said restarting wells and refineries will take longer and prove more costly this year because of COVID-19, reported Reuters.

Well shut-ins typically last a few days or weeks at most, but oil companies have adopted stringent virus precautions for refinery and offshore staff, including frequent health checks, travel restrictions, onsite protective gear, and longer work stints with pre-departure quarantines.

More time-consuming evacuations and slower restarts could lengthen post-storm recoveries, and potentially deliver a knockout blow to small offshore facilities, said William Turner, a vice president at research and consultancy Welligence Energy Analytics.

“There is an economic hit when a hurricane comes through,” said Turner, and for smaller producers strained by low prices a bad storm may be the last straw for their production.

“Some assets won’t be worth turning back on,” he said.

US energy companies face their first test of hurricane restarts under COVID-19 this week from the approaching Tropical Storm Cristobal. Three have already evacuated workers and shut some production.

National Hurricane Center forecasters expect up to 19 named Atlantic storms this year with three to six becoming major hurricanes, above the average 12 storms and three major hurricanes.

Cristobal was expected to enter the central Gulf last week, an area rich with offshore platforms, and could have seen landfall along Louisiana’s refinery last Sunday.

Gulf Coast refineries and seaports account for 45% of US oil processing capacity and the majority of energy exports. Some 1.93 million barrels per day (bpd) of oil, or 15% of the US total, also comes from US Gulf of Mexico waters.

COVID-19 already has raised costs and added travel headaches for offshore crews and complicated working conditions for refinery operators. Royal Dutch Shell hired helicopters to individually ferry out three workers on the same platform suspected of having the virus to isolate them from one another, said a Shell spokeswoman

Exxon Mobil Corp recently required a repair crew to quarantine for two weeks before allowing them to access its Destiny platform off the coast of Guyana, the country’s Environmental Protection Agency chief, Dr. Vincent Adams, told Reuters.

“Repairs have been necessarily delayed in order to observe travel restrictions and safety and isolation protocols related to COVID-19,” said Exxon spokesman Todd Spitler.

Some 120 offshore Gulf of Mexico workers have tested positive for the virus this year, and a greater number were evacuated preemptively, according to a National Ocean Industries Association spokesman.

Chevron Corp and others have lengthened offshore crew schedules to at least 21 days from 14, closed gyms and staggered meal breaks to reduce the risk of coronavirus outbreaks. Workers who spike a fever or exhibit signs of illness are whisked off for onshore medical care.

Post-hurricane restarts will also change. BHP Group quarantines employees heading to its offshore platforms in a Louisiana hotel and expects workers evacuated from rigs during storms to stay at the same or another onshore hotel until the danger passes and they can return to the platform.

Under normal circumstances, “we do not expect the challenges associated with COVID-19 to significantly impact our production deferrals,” said BHP spokeswoman Judy Dane.

At Gulf Coast refineries, the crews assigned to remain onsite during a storm will wear masks if they cannot be six feet (1.8 metres) away from another person while working at control boards, a person familiar with the matter said.

The “ride-out” team will also have temperature checks before entering the facility, and be required to self-report any symptoms of the illness, the person said.

“CDC-recommended guidelines and safety practices, including daily self-health assessments, limited gathering sizes, social distancing, wearing masks where appropriate, will remain in effect at our refineries,” said Lillian Riojas, spokeswoman for Valero Energy Corp.

As MRC reported earlier, in May 2020, ExxonMobil said it had increased production of critical raw materials for masks, gowns and hand sanitiser used by medical professionals and first responders leading the efforts to combat the global Covid-19 pandemic. The company increased its capability to manufacture specialised polypropylene (PP), used in medical masks and gowns, by about 1,000 tonnes per month, which is enough to enable production of up to 200 million medical masks, or 20 million gowns.

We also 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 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) -- Arkema says it has joined the World Business Council for Sustainable Development (WBCSD), an organization of more than 200 businesses working to accelerate the transition to a sustainable world, reported Chemweek.

Arkema is the latest of a growing list of chemical companies such as BASF, Evonik Industries, DSM, and AkzoNobel that have joined WBCSD.

“More than ever, in a world faced with economic, environmental, and social challenges, our mission as an industrial company is to use our expertise in materials science to facilitate the transition to a sustainable world. Together with other WBCSD partners, we will be able to accelerate this transition and provide innovative solutions that contribute to the sustainable development goals defined by the UN,” says Thierry Le Henaff, chairman and CEO at Arkema.

Arkema adopted a new climate plan, in line with the Paris Agreement, at the beginning of this year, to contribute to a global warming target of “well below 2°C” and reduce its overall greenhouse gas emissions 38% by 2030, the company says.

As MRC reported before, Arkema said earlier this week that it has finalized the divestment of its functional polyolefins business to SK Global Chemical. The divestment was announced last year. Arkema says the sale forms part of its strategy to refocus the group’s activities on specialty materials.

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.

Arkema is a global manufacturer in specialty chemicals and advanced materials, with 3 business segments - High Performance Materials, Industrial Specialties, and Coating Solutions - and globally recognized brands. The Group reports annual sales of EUR8.8 billion. Buoyed by the collective energy of its 20,000 employees, Arkema operates in close to 55 countries.
MRC

MOSCOW (MRC) -- Solvay and Leonardo have signed a five-year material supply agreement for programmes across its Aerostructures, Aircraft, Helicopters and Electronics divisions, said Aero-mag.

Solvay will provide a broad range of market leading and innovative materials including thermoset composites CYCOM 977-2 and CYCOM 970, thermoplastic composites APC and APC-2 and SURFACEMASTER 905 adhesives. In addition to material supply, Solvay will partner with Leonardo in multiple R&D initiatives targeting the development of new materials and process technologies.

"We value our strong and longstanding relationship with Leonardo,” said Carmelo Lo Faro, president of Solvay’s Composite Materials Global Business Unit. “With this new agreement we look forward to collaborating with Leonardo as they expand their business in both commercial and defense applications."

As MRC informed earlier, Solvay SA said it will close two plants making composites for Airbus SE and Boeing Co. in a sign the deepening aerospace crisis is hitting suppliers of even the latest aircraft materials. The Belgian chemical maker is adding to savings achieved in the past year following the grounding of Boeing’s 737 Max.

As MRC informed earlier, Russia's output of products from polymers grew in April 2020 by 11.2% year on year due to quarantine restrictions. However, this figure increased by 3.4% year on year in the first four months of 2020. According to the Russian Federal State Statistics Service, April production of unreinforced and non-combined films decreased to 107,000 tonnes from 110,400 tonnes a month earlier. Output of films products grew in the first four months of 2020 by 12.5% year on year to 402,800 tonnes.
MRC

MOSCOW (MRC) -- Dow, the world’s leading materials science company, introduces DOWSIL™ 8024 Food Contact Release Emulsion, an innovative waterborne silicone emulsion that brings improved performance levels to food processors and suppliers across a wide range of direct and indirect food contact applications, said the company.

"The global food processing industry is looking for solutions that address three key market needs – flexibility to respond to evolving consumer trends, improved productivity, and safe operations,” said Arturo Cuellar, global market manager for performance chemicals at Dow Consumer Solutions. “DOWSIL™ 8024 Food Contact Release Emulsion meets these needs, as it provides our customers with a distinct set of performance attributes, including low use levels, high release and lubrication efficiency, low volatility, and adheres to major global and regional food contact regulations and certifications to keep operations efficient and customers safe."

Heat-resistant, odorless, non-staining and non-corrosive, DOWSIL™ 8024 Food Contact Release Emulsion enhances performance and brings versatility to the food processing industry as it can be diluted with water to adapt its properties to meet specific customer needs. DOWSIL™ 8024 can be used as a release agent for paper, plastic, and rubber food container parts, as a lubricant for food conveyor and transfer belt, as an anti-blocking agent for paper and plastic sheets, or as an additive in organic-based formulations.

Dow’s technical service and development specialists Tim Roggow and Elodie Raynaud will present the specifics of this novel waterborne silicone emulsion and showcase its performance attributes in direct and indirect food contact applications during a dedicated webinar on Tuesday, June 30 at 10 a.m. Eastern Time. Participants are invited to register online.

Dow's solutions for the food processing industry help advance production efficiency and product quality while supporting longer-lasting goods. Our offering includes defoamers, release agents, mold inhibitors, and chelating agents.

As MRC informed earlier, in mid-May 2020, USA based Dow Chemical announced plans to shut three polyethylene (PE) plants in the USA and Argentina to avoid piling inventories amid sluggish global demand conditions due to the COVID-19 related lockdown.

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.

The Dow Chemical Company is an American multinational chemical corporation headquartered in Midland, Michigan, United States. Dow is a large producer of plastics, including polystyrene (PS), polyurethane, polyethylene, polypropylene, and synthetic rubber.

Dow combines global breadth, asset integration and scale, focused innovation and leading business positions to achieve profitable growth. The Company’s ambition is to become the most innovative, customer centric, inclusive and sustainable materials science company. Dow’s portfolio of plastics, industrial intermediates, coatings and silicones businesses delivers a broad range of differentiated science-based products and solutions for its customers in high-growth market segments, such as packaging, infrastructure and consumer care. Dow operates 109 manufacturing sites in 31 countries and employs approximately 36,500 people. Dow delivered sales of approximately $43 billion in 2019. References to Dow or the Company mean Dow Inc. and its subsidiaries.
MRC