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Oil rises, as investors focus on vaccine rollout, brush off recovery concerns

December 17/2020

MOSCOW (MRC) -- Oil prices rose on Tuesday as investors focused on the rollout of COVID-19 vaccines, looking past tightening lockdowns in Europe and forecasts for a slower-than-expected recovery in fuel demand, reported Reuters.

Brent crude settled at USD50.76 a barrel, rising 47 cents, or 0.9%. US West Texas Intermediate (WTI) crude settled at USD47.62 a barrel, gaining 1.3%, or 63 cents.

The United States began vaccinating people on Monday as the countrys COVID-19 death toll crossed the 300,000 mark. Britain and Canada have also begun to administer shots.

The crude market continues to seize upon the future outlook of the post-pandemic period, which could be as soon as next summer, said John Kilduff, partner at Again Capital in New York.

Crude oil throughput rose by 3.2% year-over-year in China in November,a record. That helped investor sentiment about coming increases in fuel demand, said Phil Flynn, senior analyst at Price Futures Group in Chicago. China has been one of the rare countries where oil demand has fully recovered from earlier this year.

People would assume that the oil demand surge is right around the corner, Flynn said.

Still, the International Energy Agency said on Tuesday any impact of vaccines on demand is still several months away, while OPEC said on Monday oil demand will rise more slowly than expected.

Brent hit USD51.06 on Dec. 10, highest since March, supported by vaccine approvals, even as the infection rate has surged in most regions worldwide.

London stepped up pandemic rules requiring bars and restaurants to close, Italy is considering more stringent steps over Christmas, and Germany is likely to be under lockdown until early 2021.

The latest snapshot of US oil supplies showed crude oil stocks unexpectedly rose last week, according to the American Petroleum Institute, an industry group.

Crude inventories swelled by 2 million barrels in the week to Dec. 11 to about 495 million barrels, compared with analysts expectations in a Reuters poll for a draw of 1.9 million barrels, API said.

Official government data was scheduled for Wednesday.

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 1,760,950 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.


mrcplast.com
Author:Margaret Volkova
Tags:Europe, PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, HDPE, ethylene, petrochemistry, BASF, Borealis, BP Plc, LyondellBasell, Sabic, Total Petrochemicals, UK, Canada, Russia, USA.
Category:General News
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