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US gasoline prices reach 9-month high as refiners cut more output

January 11/2021

MOSCOW (MRC) -- US gasoline prices hit a nine-month peak as drivers took to the roads on holiday travel, crude oil prices kept climbing and refiners further cut fuel production due to weak margins, reported Reuters.

Prices at the pump topped USD2.25 a gallon in end-December, according to the American Automobile Association, the highest since March when COVID-19 was declared a global pandemic. Supplies fell to the lowest in a month at 236.6 million barrels, according to US government data.

US rush-hour traffic this holiday season reached pandemic highs, with a congestion index posting the biggest month-on-month increase since July, according to location technology company TomTom. Still, no US city is above 2019 levels. 

Stay-at-home orders to stop the spread of COVID-19 have weighed on fuel demand all year, sinking demand and prices for gasoline and other motor fuels. Refineries were running at average utilization rates below 80% last year, the latest Energy Information Administration data showed.

Major refiners Exxon Mobil Corp and Royal Dutch Shell Plc were trimming output on weak profits. Contributing to the retail price rise: oil has rallied to around 10-month highs as vaccine distributions expand.

As MRC informed previously, Shell said in late December, 2020, it expects improved base and intermediate chemicals margins in the fourth quarter compared with the third quarter of 2020. The company did not give specific estimates for the forecast margins in a trading update for the fourth quarter.

We remind that Royal Dutch Shell plc. said in November, 2020, that its petrochemical complex of several billion dollars in Western Pennsylvania was about 70% complete and was in the process to enter service in the early 2020s. The plant's costs are estimated to be USD6-USD10 billion, where ethane will be transformed into plastic feedstock. The facility is equipped to produce 1.5 million metric tons per year (mmty) of ethylene and 1.6 mmty of polyethylene (PE), two important constituents of plastics.

Ethylene and propylene are feedstocks for producing PE and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 1,990,280 tonnes in the first eleven months of 2020, up by 1% year on year. Only high density polyethylene (HDPE) shipments increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 090,900 tonnes in the first eleven months of 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP random copolymer, propylene, HDPE, ethylene, petrochemistry, Shell, Russia.
Category:General News
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