MOSCOW (MRC) -- Crude oil futures rose during the mid-morning trade in Asia Nov. 24, extending overnight gains, as the market remained supported by the progress of a third potential COVID-19 vaccine and co-operation from US President Donald Trump in moving President-elect Joe Biden's transition forward, reported S&P Global.
At 10:51 am Singapore time (0251 GMT), ICE Brent January crude futures were up 35 cents/b (0.76%) from the Nov. 23 settle at USD46.41/b, while the NYMEX January light sweet crude contract was 37 cent/b (0.86%) higher at USD43.43/b.
The contracts had risen 2.45% and 1.51% respectively on Nov. 23 on reports that a Oxford-AstraZeneca vaccine had an average efficacy of 70%, with analysts noting it was cheaper to produce and distribute than two other vaccines that have also released promising results in recent days.
"With the earlier Pfizer and BioNtech and the Moderna vaccine announcements, and the recent AstraZeneca and Oxford vaccine announcement, we can see the end (of the pandemic) in sight," OANDA senior market analyst Jeffrey Halley told S&P Global Platts Nov. 24.
Stephen Innes, chief global market strategist at Axi, echoed the same sentiment, saying in a Nov. 24 note: "Oil markets are rightly jumping for joy as the AstraZeneca delivery is a big deal, as most of the developed world will be able to immunize its most at-risk population to COVID by the spring and likely the entire community by mid-year."
Meanwhile, uncertainty in the US political arena eased after Government Services Administration chief Emily Murphy gave the approval to begin the formal transition process to a Biden presidency, with Trump also expressing his amenability to following "the initial protocols" in a tweet.
Halley noted that this portended well for the oil market as "it looks like Trump has conceded the election unofficially, paving the way for the Biden administration, which is perceived to be much more trade friendly. Biden also plans to nominate Janet Yellen as Treasury secretary, and this news has been positive for oil and the broader risk assets.
"Greater international trade equals greater growth and greater growth equals more oil consumption, which means higher prices. That is the simple equation that we are going to see in Asia today," Halley added.
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% 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 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.
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