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Crude futures stable in Asia as rising coronavirus cases offset US inventory draw

August 06/2020

MOSCOW (MRC) -- Crude oil futures were largely steady in mid-morning trade in Asia July 30, as a sharp uptick in global coronavirus cases overrode a deep decline in US inventory stocks, reported S&P Global.

At 10:30 am Singapore time (0230 GMT), ICE Brent September crude futures was up 5 cents/b (0.11%) from the July 29 settle at USD43.80/b, while NYMEX September light sweet crude contract was up by 5 cents/b (0.12%) at USD41.32/b.

US crude oil inventories fell sharply during the week ended July 24 as exports and refinery demand climbed to multi-month highs, US Energy Information Administration data showed July 29.

However, total gasoline stocks climbed 650,000 barrels to 247.39 million barrels, pushing inventories to 7.9% above the five-year average while nationwide distillate inventories were also up 500,000 barrels at 178.39 million barrels, about 26% above the five-year average and notably, a fresh 38-year high.

"The mild market reaction to a huge inventory draw suggests that the gasoline inventory glut is providing the poor eye candy," Stephen Innes, chief global markets analyst at AxiCorp, said in a note July 30.

"Given how noisy this data set has been of late, that traders would rather wait before jumping for the inventory prints to flesh out a more convincing two- to four-week trend," he added.

Meanwhile, the US Federal Reserve Federal Open Markets Committee, in a move the market widely expected, held its target interest rate flat at 0-25 basis points Wednesday and extended its securities purchasing programs.

Globally, rising coronavirus infections and record daily fatalities in some US states continued to weigh on market sentiment. The number of total confirmed infections worldwide currently stands at 16.96 million, latest data from John Hopkins University showed. Cases remained high in US, Brazil and India, and combined, they account for about 50% of the worldwide infections.

In US, deaths from the coronavirus have surpassed 150,000. California, Texas and Florida - the three most populous state in the US - each reported a new single-day record of daily fatalities, according to media reports.

"The continued COVID-19 spread and rising fatalities remains a prevalent issue dragging on sentiment and more broadly capping further gains for crude oil prices from the current consolidation," Pan Jingyi, market strategist at IG, said July 30.

As MRC informed previously, data collected and tabulated by the American Chemistry Council (ACC) show that due to growth in China, global chemicals production rose by 0.6 percent in June, an improvement from the 0.5 percent decline in May, Production has been declining throughout this year, with the last monthly gain occurring in December 2019. During June, chemical production fell in major regions except Asia-Pacific. Headline global production was off 7.2 percent year-over-year (Y/Y) on a three-month moving average (3MMA) basis and was off 7.4 percent from the peak December level. Global output stood at 109.8 percent of its average 2012 levels.

At the same time, Russia's output of chemical products rose in June 2020 by 2.6% year on year. However, production of basic chemicals increased year on year by 4.9% in the first six months of 2020. According to the Federal State Statistics Service of the Russian Federation, polymers in primary form accounted for the greatest increase in the output in January-June. Production of benzene was 106,000 tonnes in June 2020, compared to 110,000 tonnes a month earlier. Overall output of this product reached 721,000 tonnes over the stated period, up by 3.9% year on year. June production of polymers in primary form fell to 791,000 tonnes from 820,000 tonnes in May partially because of a scheduled shutdown for maintenance at ZapSibNeftekhim. Output of polymers in primary form totalled 4,900,000 tonnes over the stated period, up by 14.8%  year on year.

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.


mrcplast.com
Author:Margaret Volkova
Tags:Asia, Europe, PP, PE, benzene, crude and gaz condensate, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, Russia, USA.
Category:General News
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