|
MOSCOW (MRC) -- U.S. crude oil
production was down more than 2 million barrels per day (bpd) in October from
earlier this year, as weak prices and tepid demand due to the coronavirus
pandemic weighed on output, a government report showed, said Hydrocarbonprocessing.
The
report suggested that crude demand in the world’s largest economy remained below
the highs of earlier this year, and production was largely flat since cuts began
in the spring. Total U.S. oil demand in October was down by 2.15 million bpd, or
more than 10% below the same month a year earlier. The decline was sharper than
the 9.5% seen in September.
Output has fallen from a record-high monthly
average of 12.86 million bpd in November, 2019. Production dropped sharply in
May as low demand and prices forced widespread drilling cuts. Oil output dropped
by 442,000 barrels per day to 10.42 million bpd in October, the latest month for
which data was available. The losses were led by declines in the offshore U.S.
Gulf of Mexico, according to the Energy Information Administration
report.
Storms that month caused offshore production shut-ins,
contributing to the losses. Still, even without the Gulf declines, production
remained below pre-pandemic levels. Top onshore producers Texas and North Dakota
reported modest gains in the month as some producers brought into production
wells that had been shut, as prices improved.
Meanwhile, U.S. natural gas
production for October was 99,568 million cubic feet a day, down from 100,221 in
September.
As MRC reported earlier,
oil producers face an unprecedented challenge to balance supply and demand as
factors including the pace and response to COVID-19 vaccines cloud the outlook,
according to an official with International Energy Agency's (IEA)
statement.
We remind that the
COVID-19 outbreak has led to an unprecedented decline in demand affecting all
sections of the Russian economy, which has impacted the demand for
petrochemicals in the short-term. However, the pandemic triggered an increase in
the demand for polymers in food packaging, and cleaning and hygiene products,
according to GlobalData, a leading data and analytics company. With Russian
petrochemical companies having the advantage of access to low-cost feedstock,
and proximity to demand-rich Asian (primarily China) and European markets for
the supply of petrochemical products, these companies appear to be
well-positioned to derive full benefits from an improving market environment and
global economy post-COVID-19, says GlobalData.
We also remind that in
December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on
potential investments in Uzbekistan including a major expansion of
Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed
construction of a new gas chemicals facility. The signed cooperation agreement
for the projects includes “the creation of a gas chemical complex using
methanol-to-olefins (MTO) technology, and the expansion of the production
capacity of the Shurtan Gas Chemical Complex”.
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. |
