MOSCOW (MRC) -- Crude oil futures edged higher during mid-morning trade in Asia Dec. 24 on positive crude stocks data from the US Energy Information Administration, and shrugging off uncertainty over the passing of a US stimulus package, reported S&P Global.
At 10:42 am Singapore time (0242 GMT), the ICE Brent February contract was up 14 cents/b (0.27%) from the Dec. 23 settle at USD50.34/b, while the February NYMEX light sweet crude contract was up 11 cents/b (0.23%) at USD48.23/b. The markers had risen 2.24% and 2.34% respectively on Dec. 23.
The uptrend continued into early trade in Asia Dec. 24, fueled by the release of EIA data showing that US crude inventories fell 570,000 barrels in the week ended Dec. 18 to 499.53 million barrels. Although this was short of analyst expectations of around a 4.7 million-barrel draw, it was more bullish than the American Petroleum Institute's Dec. 22 estimate of a 2.7 million-barrel build in the week.
The EIA report also suggested fundamentals in downstream markets had improved, with US gasoline stocks falling 1.13 million barrels to 237.75 million barrels and distillate stocks falling 2.33 million barrels to 148.93 million barrels in the week. Analysts in contrast had expected a 1.4 million-barrel rise in gasoline stocks and a 1.1 million-barrel fall in distillate stocks.
According to the EIA data, implied demand for gasoline rose 422,000 b/d in the week ended Dec. 18 to 7.9 million b/d, in line with seasonal norms and as Apple Mobility data showed that US driving activity was at a four-week high. Implied distillate demand rose 172,000 b/d to 4.17 million b/d.
"The EIA data is definitely providing some icing to the cake, and there are some other factors at play here as well, including some weakness in the dollar and a slight improvement in US jobless claims numbers " Jeffrey Halley, senior market analyst at OANDA, told S&P Global Platts on Dec. 24.
The political flip-flop over US fiscal relief measures was continuing after US President Donald Trump demanded changes to the Congress-approved stimulus package, including increasing the package's "ridiculously low USD600 direct payments.
However, analysts said oil market participants still expect a stimulus deal to eventually be squeezed out, and were largely ignoring the political wrangling.
"The market seems to have largely overlooked President Donald Trump's rejection of the stimulus package as, despite all the to and fro, the expectation is that a stimulus deal will still emerge and there is a possibility that this deal could be even bigger," Halley said.
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 DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
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