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Japan oil refiners chief expects gasoline demand to fall and OPEC+ to delay plan to boost output

November 24/2020

MOSCOW (MRC) -- Sugimori, who chairs Japan's biggest oil refiner Eneos Holdings Inc, said that Japan's gasoline demand may fall deeper again in December and January due to the recent surge in the COVID-19 infections, reported Reuters.

Japanese gasoline demand is expected to decline only by 2% in November from a year earlier. But the drop may expand to as much as 9% in December-January, he said, matching the fall seen in August when the number of coronavirus cases spiked.

The head of the Petroleum Association of Japan (PAJ) said on Friday he expects a grouping of OPEC and its allies, known as OPEC+, will likely delay a plan to boost output in January and stick to existing curbs of 7.7 million barrels per day (bpd).

"Given the weaker oil demand amid the resurgence of COVID-19 infections, OPEC+ is likely to keep the current curbs ... after January," Tsutomu Sugimori, president of PAJ, told a news conference.

OPEC+, comprising the Organization of the Petroleum Exporting Countries, Russia and other producers, will discuss policy at a meeting on Nov. 30 and Dec. 1.

The 7.7 million bpd reduction was implemented earlier this year to try to counter the impact of a drop in demand triggered by coronavirus lockdowns around the world.

Sources say OPEC+ members are now leaning towards delaying a previously agreed plan to raise output in January by 2 million bpd.

Tokyo raised its coronavirus alert to the highest level on Thursday as its daily tally of new infections rose to a record 534 and its governor called for maximum caution as the year-end holiday season approaches.

As MRC informed earlier, ENEOS Corporation (formerly known as JXTG Nippon Oil & Energy) is planning to take its larger naphtha cracker in Kawasaki off-line on 1 December 2020 for repairment after a technical issue reported at the butadiene separation unit last week. The cracker is currently operating at 95% capacity and would slowly reduce the run rates to completely shut down by the beginning of December. The cracker with an annual capacity of 515,000 tons/year of ethylene, 300,000 tons/year of propylene, and 105,000 tons/year of butadiene would be shut for a month. The companys smaller cracker at the same location is not affected by the issue.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 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, excluding producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.

Japan's largest refiner JXTG Nippon Oil & Energy was renamed ENEOS Corporation on 25 June, 2020, as part of a wider re-organization of the parent company JXTG Holdings. The move, which also involved renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, 2019. JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP random copolymer, propylene, HDPE, ethylene, petrochemistry, Eneos, Russia, Japan.
Category:General News
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