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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. |
