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Crude oil futures fall ahead of OPEC+ meeting

September 17/2020

MOSCOW (MRC) -- Crude oil futures fell during mid-morning trade in Asia Sept. 17 despite the draw on US' crude inventories, as the market awaited news from the impending OPEC+ meeting, reported S&P Global.

At 11.23 am Singapore time (0323 GMT), ICE Brent November crude futures were trading at USD41.63/b, down 59 cents/b (1.47%) from the Sept. 16 settle, while the NYMEX October light sweet crude contract was at USD39.53/b, down 63 cents/b (1.49%).

The decline comes after both crude oil markers surged USD1.69/b and USD1.88/b, respectively, overnight after the US Energy Information Administration released data showing that US commercial crude inventories had declined 4.39 million barrels during the week ended Sept. 11.

"Following yesterday's API draw of 9.5 million barrels, some energy traders were not impressed with the EIA report of a 4.4 million drop in stockpiles," Edward Moya, senior market analyst from OANDA, said in a Sept. 17 note.

In the same note, Moya said: "WTI crude is back above the USD40/b level, but it might struggle here as energy traders start to doubt that the OPEC+ deal will last much longer. The Saudis are not going to save the day and the lack of compliance with the cheaters, UAE and Iraq, will mean oversupply concerns are possibly just around the corner."

OPEC and its allies will have an online monitoring meeting on Sept. 17 to assess the situation, and determine whether their current production cuts are sufficient to prevent an oil supply glut amid increased expectations of non-OPEC supply.

Analysts have indicated that they expect the meeting to yield little change with focus primarily on compliance.

"Beyond reaffirming compliance and perhaps some resolution on catching up on quota volumes, we should expect limited new news and certainly nothing to significantly bump the crude market out of its current funk and push Brent back to USD45/b," Stephen Innes, chief global markets xtrategist at AxiCorp, said in a Sept. 17 note.

Earlier this year, as MRC wrote before, 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.

And 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.


mrcplast.com
Author:Margaret Volkova
Tags:Asia, Europe, PP, PE, crude and gaz condensate, homopolymer PP, propylene, HDPE, ethylene, petrochemistry, BASF, Borealis, BP Plc, LyondellBasell, Sabic, Total Petrochemicals, Iraq, United Arab Emirates (UAE), Russia, USA.
Category:General News
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