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MOSCOW (MRC) -- Crude oil futures moved
lower during mid-morning trade in Asia Nov. 18, after data from the American
Petroleum Institute showed a build in US crude inventories, and after the Joint
Ministerial Monitoring Committee (JMMC) failed to make definite statements on
the status of OPEC+ production cuts, reported S&P Global.
At 10:32 am
Singapore time (0232 GMT), ICE Brent January crude futures were down 15 cents/b
(0.34%) from the Nov. 17 settle at USD43.60/b, while the NYMEX December light
sweet crude contract was down 24 cents/b (0.58%) at USD41.19/b.
The lower
crude prices were seen after API data showed Nov. 17 that crude inventories rose
by 4.174 million barrels in the week ended Nov. 13.
Fundamentals in the
downstream gasoline markets were also unimproved, with API data showing a
256,000-barrel build in gasoline inventories in the week ended Nov. 13. The one
positive from the API report was a 5.024 million-barrel draw in distillate
inventories.
At 10:32 am Singapore time, the NYMEX December RBOB contract
was trading 0.38 cent/gal (0.33%) lower than the Nov. 17 settle at USD1.1494/gal
and the NYMEX December ULSD contract was down by 0.12 cent/gal (0.10%) at
USD1.2379/gal.
Pan Jingyi, senior market strategist at IG, acknowledged
that the bearish API data had dampened sentiment this morning, and added, "The
market is taking a breather after a vaccine-driven rally, and reassessing the
situation on the pandemic front, as infection numbers have been rising the past
couple of days."
Meanwhile, a Nov. 17 JMMC meeting did not inspire any
confidence in the market, as it failed to offer any insight as to whether the
OPEC+ alliance will extend its current production cuts into next
year.
Based on prior hints from key figures within OPEC+, the market
believes that the alliance will extend its output cuts of 7.7 million b/d by at
least three months, instead of easing them to 5.8 million b/d as planned from
January 2021 onward.
The market was expecting more definitive statements
on the status of the production cuts from the meeting, but delegates told
S&P Global Platts that OPEC+ will announce its decision when it convenes
online from Nov. 30-Dec. 1.
"While OPEC+ can extend the current cuts at
its next full meeting on Nov. 30, it may well be viewed as a disappointment that
we did not hear something more explicit today, especially in the context of a
market that, on the margin, is still hopeful that additional cuts in 2021 will
be at least put on the table," Stephen Innes, chief global market strategist at
Axi, said in a Nov. 18 note.
Even though there was no production
guidance, the JMMC reaffirmed the OPEC+ alliance's resolve to balance demand
with supply in the oil market.
Saudi energy minister Prince Abdulaziz bin
Salman said in his opening remarks: "We must maintain high compliance while
retaining the flexibility and nimbleness to adjust our commitment in changing
market conditions ... we must be prepared to act according to the requirements
of the market."
As MRC informed
previously, global oil demand may have already peaked, according to BP's latest
long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto
a weaker growth trajectory and accelerates the shift to cleaner
fuels.
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.
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).
ccording to MRC's ScanPlast report,
Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine
months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE)
shipments increased. At the same time, PP shipments to the Russian market
reached 880,130 tonnes in the nine months of 2020 (calculated using the formula:
production minus exports plus imports, exluding producers' inventories as of 1
January, 2020). Supply increased exclusively of PP random copolymer. |
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