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Crude futures up on optimism over Europe reopening

April 23/2021

MOSCOW (MRC) -- Crude oil futures were higher in the mid-morning trade in Asia April 23, as optimism over the reopening of Europe lent support to the market, even as concerns remained on the progression of the pandemic in India, reported S&P Global.

At 11:17 am Singapore time (0317 GMT), the ICE Brent June contract was up 27 cents/b (0.41%) from the April 22 settle at USD65.67/b, while the June NYMEX light sweet crude contract was 36 cents/b (0.59%) higher at USD61.79/b.

Market analysts said that oil prices pared their loses in the week of April 18 due to an improved outlook for Europe. COVID-19 cases in major European economies have plateaued and countries such as Italy, Greece and France are on track to ease some of their mobility restrictions, according to media reports.

Meanwhile, concerns over the rise in COVID-19 infection numbers in India, the third largest oil importer in the world, continued to persist, capping upside in the market. The country reported record highs of 314,644 cases and 2,104 deaths on April 21, latest data from John Hopkins university showed.

Analysts noted that volatility in the market seen in the week of April 18 comes from the tussle between a bullish outlook for oil demand in the US and Europe, and a bearish outlook in India.

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 Uzbekneftegazs 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.
Author:Margaret Volkova
Tags:Asia, Europe, PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, ethylene, petrochemistry, Gazprom neft, Sibur Holding, Shurtans Gas-Chemical Plant, India, Russia, USA, Uzbekistan.
Category:General News
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