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US distillate inventories have fallen back within the five-year range

December 01/2020

MOSCOW (MRC) -- According to the US Energy Information Administrationís Weekly Petroleum Status Report, for the week ending November 13, 2020, US distillate inventories fell to 143 million barrels, back within its previous five-year (2015-19) range for the first time since May 8, reported Hydrocarbonprocessing.

US distillate inventories reached 180 million barrels in late July, only 3% less than in December 1982, the largest US inventory in EIAís data, which go back to 1982.

Distillate inventories started the year near the bottom of the five-year range and briefly fell lower than the range in March and April. Distillate inventories then increased rapidly as the US economy responded to COVID-19, and from late May through mid-September, inventories remained higher than 174 million barrels. Since mid-September, inventories have been declining and are once again within the five-year range.

US demand for distillate has been generally increasing since it reached an annual low in May (based on the rolling four-week average). The increasing demand for distillate fuel has contributed to the recent inventory decline. As of the week ending November 20, weekly EIA data indicate that distillate demand reached 4.2 million barrels per day (b/d), similar to the previous five-year average for this time of year.

In addition to rising demand from the trucking and railroad industries, refineries have been making less distillate fuel. Gross inputs into refineries measured 14.2 million bpd as of November 20, or 14% lower than the previous five-year average for this time of year. Distillate yields, or the ratio of distillate fuel production to refinery inputs, have fallen since reaching a record high of 38% in April, and more recently, it measured 31% in the week ending November 20, which is much closer to the previous five-year average for this time of year.

As MRC informed before, slumping fuel consumption during the pandemic is accelerating the long-term shift of refining capacity from North America and Europe to Asia, and from older, smaller refineries to modern, higher-capacity mega-refineries. The result is a wave of closures, often centering on refineries that only narrowly survived the previous closure wave in the years after the recession in 2008/09.

We remind that PetroChina has nearly doubled the amount of Russian crude being processed at its refinery in Dalian, the company's biggest, since January 2018, as a new supply agreement had come into effect. The Dalian Petrochemical Corp, located in the northeast port city of Dalian, was expected to process 13 million tonnes, or 260,000 bpd of Russian pipeline crude in 2018, up by about 85 to 90 percent from the previous year's level. Dalian has the capacity to process about 410,000 bpd of crude. The increase follows an agreement worked out between the Russian and Chinese governments under which Russia's top oil producer Rosneft was to supply 30 million tonnes of ESPO Blend crude to PetroChina in 2018, or about 600,000 bpd. That would have represented an increase of 50 percent over 2017 volumes.

Ethylene and propylene are feedstocks for producing 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, exluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.


mrcplast.com
Author:Margaret Volkova
Tags:Asia, PP, PE, crude and gaz condensate, PP random copolymer, propylene, HDPE, ethylene, petrochemistry, PetroChina, Rosneft, China, Russia, USA.
Category:General News
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