MOSCOW (MRC) -- Crude oil rose during mid-morning trade in Asia Dec. 29 as the oil complex was buoyed by bullish sentiment across risk assets emanating from US President Donald Trump's signing of the massive coronavirus relief and spending package, with a weaker dollar also lending market support, reported S&P Global.
At 10:55 am Singapore time (0255 GMT), the ICE Brent February contract was up 21 cents/b (0.41%) from the Dec. 28 settle to USD51.07/b, while the February NYMEX light sweet crude contract was up 24 cents/b (0.5%) at US47.86/b.
Both markers had fallen by 0.84% and 1.26% on Dec. 28 to settle at USD50.86/b and USD47.62/b, respectively, as concerns over the spread of the highly infectious B.1.1.7 variant of the coronavirus had weighed on the market.
In the Asian trading session, however, oil recouped the losses from Dec. 28, rising in tandem with Asia Pacific equity markets and US equity futures.
Margaret Yang, strategist at DailyFX, told S&P Global Platts Dec. 29: "Crude oil prices are buoyed by favorable sentiment across risk assets on the passing of US stimulus package, as well as a weakening US dollar."
On Dec. 28, Trump had signed the coronavirus relief and spending package, which includes a Congress-approved $900 billion stimulus package and government funding through September 2021, spurring optimism over a US economic recovery.
In an accompanying statement, Trump had demanded that Congress increase direct payments to USD2,000 per individual - a measure that has been approved by the Democrat-controlled US House of Representatives.
"The prospects for energy demand may be brightened by the coronavirus relief aid, especially after the House voted to increase the stimulus check amount to USD2,000 from US600 this morning," Yang said.
Republicans, however, have shown resistance to higher direct payments, and it still remains unclear if the measure will be held to a vote in the Republican-controlled Senate.
Meanwhile, analysts surveyed by S&P Global Platts were bullish in their forecast for US commercial crude drawdown in the week ended Dec. 25, expecting stocks to have declined 3.8 million barrels to around 495.7 million barrels.
Comprehensive data on weekly inventory reports by the American Petroleum Institute and the US Energy Information Administration will be released on Dec. 29 and Dec. 30, respectively.
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.
MRC