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COVID-19 - News digest as of 13.01.2021

January 13/2021

1. OPEC crude output cuts should help US shale profits in 2021

MOSCOW (MRC) -- A decision by OPEC and allied countries to cut crude production through March delivered a late Christmas present for US shale firms that have slashed costs, but any rise in prices spurred by the unexpected move may be just a modest stocking stuffer, reported Reuters. US crude oil production has fallen 2 million barrels per day in the last year as low prices and demand forced shale producers to cut their losses. Investors had already been pressuring the industry to curb spending and boost returns before the pandemic hit. Shale output was quickly cut, but might return quickly if prices keep rising. Last Tuesday, Saudi Arabia, the worlds biggest oil exporter, said it would voluntarily reduce its production by 1 million barrels per day (bpd) in February and March, after Russia pushed to increase output, worried about US shale capitalizing on the groups cuts. Russia and Kazakhstan will increase their output, reluctant to cede market share to the United States. Overall, OPEC+ had been due to restore 500,000 bpd in each of the two months. Saudi officials were concerned new increases would outpace demand during new coronavirus lockdowns.

2. Crude rally stalls amid fresh lockdowns, stronger dollar

MOSCOW (MRC) -- The crude price rally stumbled Jan. 11, with futures settling mostly lower amid fresh pandemic demand growth concerns following the imposition of new lockdowns in Asia, reported S&P Global. NYMEX February WTI settled up 1 cent at USD52.25/b, while ICE March Brent finished down 33 cents at USD55.66/b. A fresh outbreak of coronavirus infections in Hebei province, near Beijing, has led to lockdowns in provincial capital Shijiazhuang and Xingtai, China"s National Health Commission said Jan. 8, adding the epidemiological origin of the outbreak has not been identified. Residents have been barred from leaving, and public transport has been halted. On Jan. 11, the NHC reported 103 new cases of infections in China, the highest daily rise since late July, with 82 out of the 85 local cases from Hebei.

3. Sika sales declined in 2020 on negative currency effects

MOSCOW (MRC) -- Sika has provided a financial update and says that its sales decreased 2.9% in 2020 to 7.88 billion Swiss francs (USD8.85 billion), mainly due to strong negative currency effects, said Chemweek. Sales in local currencies increased 3.4% with a strong acquisition effect of 7.2% offsetting a 3.8% organic decline in sales.  Meanwhile, sales in local currencies in the fourth quarter went up 5.5% year on year, of which 4.1% was organic growth, the company says. "The 2020 fiscal year was overshadowed by the global coronavirus pandemic, which had a number of serious repercussions for the construction and automotive sectors. Thanks to the strong motivation of our employees and their pronounced customer focus, Sika managed to perform successfully in this highly challenging market environment and achieve above-average results, says Paul Schuler, CEO of Sika.

4. Oil hits 11-month high just below USD57 as Saudi cut supports

MOSCOW (MRC) -- Oil hit an 11-month high just below USD57 a barrel on Tuesday as tighter supply and expectations of a drop in U.S. inventories offset concerns over rising coronavirus cases globally, said Reuters. Saudi Arabia plans to cut output by an extra 1 million barrels per day (bpd) in February and March to stop inventories from building up. The latest U.S. supply reports are expected to show crude stocks fell for a fifth straight week. Brent crude was 79 cents, or 1.4%, higher at USD56.45 a barrel by 1304 GMT and earlier hit USD56.75, the highest since last February. U.S. West Texas Intermediate (WTI) gained 89 cents, or 1.7%, to USD53.14. "Saudi Arabia in particular is ensuring through its additional voluntary production cuts that the market is undersupplied if anything," said Eugen Weinberg of Commerzbank.
Author:Margaret Volkova
Tags:Asia, crude and gaz condensate, medicine, petrochemistry, adhesives, construction, Sika, COVID-19, Kazakhstan, China, Russia, Saudi Arabia, USA.
Category:General News
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