MOSCOW (MRC) -- Crude oil futures fell during mid-morning Asian trade April 22 following the latest release of the US Energy Information Administration's weekly statistics, which was a mixed bag, and as sentiment slumped on pandemic-induced demand concerns after India reported record high COVID-19 infections, reported S&P Global.
At 11:03 am Singapore time (00303 GMT), the ICE Brent June contract was down 28 cents/b (0.42%) from the April 21 settle at $65.04/b, while the June NYMEX light sweet crude contract was 30 cents/b (0.49%) lower at $61.05/b.
EIA data released late April 21 showed that commercial crude stocks had climbed 600,000 barrels to 493.02 million barrels in the week ended April 16. The build came as a surprise to analysts, who had expected inventories to fall by 4.4 million barrels instead, according to an S&P Global Platts survey.
The EIA data was mixed for downstream product inventories, with gasoline stocks edging up 90,000 barrels and distillate stocks falling 1.07 million barrels last week.
Of particular concern to the market was the total product supplied figure, EIA's proxy for demand, which fell almost 8% from the week prior at 18.76 million b/d in the week ended April 16. The market, however, received solace from rising gasoline demand, which averaged 9.1 million b/d last week, up 1.8% from the week prior and the highest since August.
Over in Asia, the rise in COVID-19 cases in Japan and India portends curtailed energy demand in the region. India reported a record 295,158 cases on April 20, latest data from John Hopkins University showed, even as large parts of country remained under lockdown. Meanwhile, Japan is also considering putting Tokyo and Osaka under a state of emergency, media reports showed.
As MRC informed earlier, 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 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 ScanPlast report, Russia's estimated polyethylene (PE) consumption totalled 356,370 tonnes in the first two month of 2021, down by 9% year on year. Shipments of exclusively low density polyethylene (LDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market was 246,870 tonnes in January-February 2021, up by 30% year on year. Supply of homopolymer PP and PP block copolymers increased.
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