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MOSCOW (MRC) -- Oil demand recovery
will take a hit from a spike in new coronavirus cases before vaccine roll-outs
and stimulus measures help in the second half of the year, International Energy
Agency (IEA) said, said Hydrocarbonprocessing.
“Border
closures, social distancing measures and shutdowns...will continue to constrain
fuel demand until vaccines are more widely distributed, most likely only by the
second half of the year,” it said in its monthly report. “This recovery mainly
reflects the impact of fiscal and monetary support packages as well as the
effectiveness of steps to resolve the pandemic,” the IEA said.
The
emergence of new strains of the virus, renewed lockdowns in China and logistical
hurdles facing vaccine roll-outs contributed to the IEA’s gloomier outlook.
Noting that an improvement to global oil demand went into reverse in December,
the Paris-based watchdog lowered its forecast for the first quarter by 580,000
barrels per day (bpd) and its outlook for 2021 by 300,000 bpd.
Both
supply and demand are on track for recovery this year, and efforts by top
producers to balance the market by reining in output helped lower stockpiles of
crude and oil products worldwide, though oil stocks remained stubbornly close to
a May peak.
Given an expected demand increase in the second half of the
year, however, “much more oil is likely to be required”. Cold Asian and European
winters along with supply discipline by the Organization of the Petroleum
Exporting Countries (OPEC) and its allies boosted crude prices, the IEA said,
while the U.S. shale industry was expected to keep production flat. "If they
stick to those plans, OPEC+ may start to reclaim the market share it has
steadily lost to the U.S. and others since 2016."
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.
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