MOSCOW (MRC) -- Oil futures dipped July 17 as rising coronavirus cases prompted demand growth concerns, and global production is set to climb, reported S&P Global.
NYMEX August WTI settled down 16 cents at USD40.59/b and ICE September Brent was 23 cents lower at USD43.14/b.
The US reported over 77,000 new coronavirus infections July 16, a single-day record, according to Johns Hopkins University's Coronavirus Resource Center. The impact of the surge in new cases on oil demand is unclear. Some states, including Texas and California, have backtracked their reopening plans in a bid to slow the resurgent pandemic, but coronavirus hotspot Florida so far has shown no signs of instituting new lockdowns. Meanwhile, reopenings are continuing in less-afflicted states; New York City is set to move into Phase 4 July 20, as planned, bringing the entire state into the final phase of reopening.
"The virus situation is still bad in the US, but it doesn't seem like a return of harsh coronavirus lockdowns will happen," OANDA senior market analyst Edward Moya said. "WTI crude seems like it will continue to consolidate until a clearer picture of the demand outlook emerges."
NYMEX August ULSD settled 88 points lower at USD1.2191/gal and August RBOB shed 94 points to close at USD1.2245/gal.
The backwardation in front- to second-month NYMEX RBOB futures weakened to 1.54 cents/gal, the lowest since July 6. RBOB crack also retreated July 17. Platts prompt pipeline unleaded 87 crack against WTI fell to USD6.775/b, the lowest since June 4, and the ICE New York Harbor RBOB crack versus Brent fell to USD7.46/b, the lowest since June 1.
Amid uncertain demand outlooks, the market is also weighing the impact of rising OPEC production.
OPEC+ confirmed at its key July 15 Joint Ministerial
OPEC+ officials have in recent days sought to assure the market that the easing of quotas by 2 million b/d will
The Russian energy ministry has urged oil producers to send additional volumes to domestic refineries as output limitations under the OPEC+ deal ease starting August, deputy energy minister Pavel Sorokin said July 17.
As MRC informed before, 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 DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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