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MOSCOW (MRC) -- Crude oil futures
settled higher Oct. 14 as fundamental outlooks turned more bullish amid reports
of improved OPEC+ quota compliance and rising Chinese crude demand, reported S&P Global.
Oil climbed in a late
session rally following a Reuters report stating OPEC+ producers achieved 102%
quota compliance in September. The latest S&P Global Platts survey Oct. 9
found compliance reached 99% last month, led by the Gulf states, but discipline
from Russia and some African producers continued to slip.
Russian energy
minister Alexander Novak said Oct. 14 that OPEC+ did not expect the second
coronavirus wave to impede plans to increase oil output gradually.
The
comments come on the heel of a call between Russian President Vladimir Putin and
Saudi Arabia 's Crown Prince Mohammed bin Salman, where the pair underscored the
necessity of continuing to cooperate within OPEC+, according to a statement
posted on the Kremlin website late Oct. 13.
The call took place ahead of
a key OPEC + monitoring committee, co-chaired by Saudi Arabia and Russia, which
is scheduled to meet virtually Oct. 19, amid speculation that OPEC+ may not go
ahead with easing its current 7.7 million b/d production cut in 2021.
Oil
was already trending higher earlier in the session amid reports of rising
Chinese crude demand. China's independent refineries' crude and bitumen blend
imports were up 1.6% to 18.14 million mt, or 4.43 million b/d, in September,
from a three-month low of 17.85 million mt in August, information collected by
S&P Global Platts showed Oct. 14.
This is the fourth time that
Chinese independent refineries' crude and bitumen imports have been over 18
million mt, having hit a record high 19.81 million mt, or 4.68 million b/d, in
July, Platts data showed.
Rising Chinese demand helped push the benchmark
cash Dubai spread to Dubai futures higher for a third consecutive day. December
cash Dubai crude was assessed at a discount of 54 cents/b to same-month Dubai
futures at the 4:30 pm (0830 GMT) Singapore close on Oct. 14, a two-week high
and up from minus 75.5 cents/b the previous session, S&P Global Platts data
showed.
OPEC in its monthly oil market report released Oct. 13 raised its
global oil demand forecast for 2020 by 60,000 b/d to 90.29 million b/d citing
growing Chinese crude appetite. However, it downgraded its forecast for 2021,
expecting oil demand to total 96.84 million b/d, 80,000 b/d lower than its last
forecast in September.
Refined product futures traced crude higher, but
growing risks of a resurgent coronavirus pandemic capped the rally and weighed
on crack spreads.
NYMEX November RBOB settled 1.44 cents higher at
USD1.1971/gal and November ULSD settled up 2.35 cents at
USD1.1925/gal.
In the US, a surge in new infections in the Midwest helped
push the seven-day moving average of new cases to more than 51,000 on Oct 13,
the highest since Aug. 16, according to data from The COVID Tracking
Project.
The front-month ICE New York Harbor RBOB crack versus Brent was
testing one-month lows at around USD6.24/b midafternoon.
As MRC iformed
before, China's Sinopec has started operation of a 800,000 tons-per-year
ethylene facility at its Zhanjiang refinery. The refinery, located in the
southern Chinese coastal city of Zhanjiang, commenced operation of its 200,000
barrel per day crude oil refining units in June.
Ethylene and propylene
are feedstocks for producing polyethylene (PE) and polypropylene
(PP).
According to MRC's ScanPlast report,
Russia's estimated PE consumption totalled 1,496,500 tonnes in the first eight
months of 2020, up by 5% year on year. Shipments of all ethylene polymers
increased, except for linear low desnity polyethylene (LLDPE). At the same time,
PP shipments to the Russian market reached 767,2900 tonnes in the eight months
of 2020 (calculated using the formula - production minus exports plus imports -
and not counting producers' inventories as of 1 January, 2020). Supply increased
exclusively of PP random copolymer. |
