MOSCOW (MRC) -- OPEC+ members' decision to slowly ramp up production from next month will be balanced by increased demand as a result of the expected roll-out of coronavirus vaccines, reported Reuters with reference to Goldman Sachs' statement in a note dated Thursday.
The Organization of Petroleum Exporting Countries and Russia agreed on Thursday to ease oil output cuts by 500,000 barrels per day (bpd) to 7.2 million, from 7.7 million now, starting January.
"OPEC+ clearing the hurdle of exiting its current cuts in a coordinated way and its focus on both growing production and drawing inventories reinforces our conviction in a steady and sustainable rally in oil prices through 2021," Goldman said.
Goldman in its note also maintained its 12-month Brent price forecast of USD65 per barrel.
As MRC invofmed 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 PE and PP.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
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