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

Our Clients

Order Informer

 
Home > News >
 

Crude futures steady to higher in Asia trade as investors weigh mixed drivers

June 23/2020

MOSCOW (MRC) -- Crude oil futures were trading steady to higher in mid-morning trade in Asia June 22, with investors weighing mixed drivers at the start of a new week, said S&P Global.

At 10:00 am Singapore time (0200 GMT), ICE Brent August crude futures were up 18 cents/b (0.43%) from the June 19 settle at USD42.37/b, while the NYMEX July light sweet crude contract was 12 cents/b (0.30%) higher at USD39.87/b. "Sentiment was buoyed by OPEC's pledge to adhere better to agreed production cuts," ANZ analysts said in a June 22 note.

Crude prices have been buoyed by stepped-up pressure on OPEC+ members to adhere to production quotas following a June 18 meeting. OPEC+ crude production could fall by about 1 million b/d in July and August from May levels, based on plans submitted by Iraq and Kazakhstan to institute deeper output cuts to make up for violating their quotas and loading schedules issued by fellow compliance laggards Nigeria and Angola.

"However, there are still worrying signs ahead for the market with a second wave of COVID-19 cases in China and the US presenting a challenge for industry," the ANZ analysts said. Fears of a COVID-19 resurgence have limited gains in prices as the demand recovery outlook remains clouded.

"Traffic in Beijing has plunged as authorities battle a fresh outbreak. In the US, Apple has been forced to shut previously opened shops as cases rises in various states," the ANZ analysts noted. China reported 26 new confirmed coronavirus cases for June 20 and the emergence of a new cluster in Beijing has raised concerns of a second wave of infections.

A decline in US oil rigs was also supporting sentiment to some extent amid earlier concerns any recovery in prices could spur an increase in drilling. The US oil rig count fell by 10 to 189 in the week ending June 19, according to UOB analysts in a June 22 note citing Baker Hughes dat, noting it was the lowest since June 2009.

As MRC wrote 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.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, petrochemistry.
Category:General News
|
| More

Leave a comment

MRC help

 


 All News   News subscribe