London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950

Our Clients

Order Informer

Home > News >

Crude plunges 5% on Europe lockdowns, US inventory build

October 30/2020

MOSCOW (MRC) -- Oil futures settled near one-month lows Oct. 28 as fundamental outlooks dimmed amid tightened COVID-19 restrictions in Europe and a US crude inventory build, as per S&P Global.

NYMEX December WTI settled USD2.18 lower at USD37.39/b, and ICE December Brent was down USD2.08 at USD39.12/b.

German Chancellor Angela Merkel announced a four-week shutdown of bars, restaurants and other leisure facilities nationwide beginning Nov. 2, according to media reports. The country has seen 14,964 new COVID-19 cases and 85 deaths from the disease in the last 24 hours, the government said.

French President Emmanuel Macron announced a similar set of new restrictions in an evening address to the nation on Oct. 28, a day after the country reported 523 coronavirus deaths.

In the US, the seven-day moving average of new coronavirus infections climbed to a fresh all-time high 71,532 on Oct. 27, according to data from The COVID Tracking Project.

Bearish outlooks broke crude futures out of their recent trading range, front-month WTI and Brent last settled lower on Oct. 2.

"WTI crude could remain vulnerable if the US follows Europe's lead in bringing back tougher lockdowns," OANDA senior market analyst Edward Moya said in a note.

NYMEX November RBOB settled 6.2 cents lower at USD1.0814/gal and November ULSD was down 4.35 cents at USD1.1142/gal.

A strengthened US dollar added additional pressure to oil prices. The ICE US Dollar Index climbed to around 93.4 in afternoon trading, up from 92.93 on Oct. 27 and on pace to close at the highest since Oct. 19.

Meanwhile, US commercial crude stocks climbed 4.32 million barrels to 492.43 million barrels in the week ended Oct. 16, Energy Information Administration data showed Oct. 28. The build pushed stockpiles to more than 10% above the five-year average, marking the first time the nationwide supply hang has expanded since the week ended Sept. 4.

The build comes as US crude production rebounded to 11.1 million b/d last week, up 1.2 million b/d from the week prior as Gulf of Mexico output normalized in the wake of Hurricane Delta.

The steep selloff in crude comes even as two-thirds of the US Gulf of Mexico's crude oil volumes were shut in Oct. 28 ahead of Hurricane Zeta, which strengthened into a Category 2 storm just hours before an anticipated landfall near New Orleans.

An estimated 1.23 million b/d of crude production was shut in, reflecting 66.6% of US Gulf output, according to the US Bureau of Safety and Environmental Enforcement.

As MRC reported earlier, producers took 85% of the US Gulf's crude oil flows ahead of Hurricane Zeta and, now that the storm has passed, some Louisiana refineries are beginning to restart after suffering from the widespread power outages throughout the New Orleans area.

Ethylene and propylene are feedstocks for producing 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.
Author:Margaret Volkova
Tags:Europe, PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, ethylene, petrochemistry, USA.
Category:General News
| More

Leave a comment

MRC help


 All News   News subscribe