Crude oil futures higher on US demand outlook as concerns over Asia persist

MOSCOW (MRC) -- Crude oil futures ticked higher the mid-morning trade in Asia May 28 as positive economic data from the US augured well for oil demand, even as concerns persisted over the pandemic's progression in Asia, reported S&P Global.

At 10:26 am Singapore time (0226 GMT), the ICE Brent July contract was up 18 cents/b (0.26%) from the previous settle at USD69.64/b, while the July NYMEX light sweet crude contract was 29 cents/b (0.43%) higher at USD66.85/b.

US initial unemployment claims fell 9% on the week to a 14-month low of 406,000 in the week ended May 22, Department of Labor data released May 27 showed. The decline in claims exceeded market expectations and reinforced the US economic recovery narrative, according to analysts.

Oil and the broader commodities complex also received support from reports that US President Joe Biden will propose a USD6 trillion budget for the 2022 fiscal year.

The US' ongoing economic recovery has already been having a positive impact on oil demand, with ANZ analysts saying in a May 28 note: "American drivers (are hitting) the road in increasing numbers... they are now travelling as many miles on interstate highways as they did in 2019."

US driving activity rose 3% to 146.5% of the baseline level in the week ended May 21, the highest level since the index was launched in January 2020, Apple mobility data showed.

ING analysts echoed the positive sentiment, but cautioned that headwinds for the oil complex remain as countries in Asia continue to grapple with mobility restrictions amid a resurgence of coronavirus infections.

Another downside risk for oil is the ongoing negotiations over the Joint Comprehensive Plan of Action in Vienna, a deal that could see sanctions on Iran's oil sector being lifted, leading to the return of an additional 1 million-2 million b/d to the market. The prospect of additional Iranian barrels raises questions over the OPEC+ coalition's production plans, which includes scheduled 700,000 b/d and 840,000 b/d production increases in June and July.

Russia's deputy prime minister Alexander Novak said May 26 that the coalition should consider a possible increase in Iranian output when assessing further steps, leading to speculation that the coalition could adjust the production increase planned for July at its June 1 meeting.

As MRC wrote earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world"s third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC"s ScanPlast report, Russia"s estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) -- Mobin Petrochemical Company has reportedly shut down its refinery complex in Asaluyeh, Iran on 26 May 2021 after a flare occurred at the natural gas pipeline, according to CommoPlast.

It is uncertain on how long the company would take to restart the complex, which affected productions at five downstream methanol plants that depend on Mobin Petrochemical for gas feeds.

Among these five methanol operators, only Zagros Petrochemical has sent an official notification to its customers declaring the force majeure due to the shutdown at the upstream Mobin Petrochemical’s refinery complex, while other plants have yet to confirm the operation status. It is important to note that Sabalan Petrochemical’s 1.6 million tons/year methanol unit is currently under trial production. The company initially planned to start a commercial run in June.

Methanol is used in the methanol-to-olefins conversion process that produces ethylene and propylene monomers.

Meanwhile, methanol futures contracts in China surges visibly after the news, though polypropylene (PP) and polyethylene (PE) buyers retain a calm stance to monitor further development after news that Mobin Petrochemical might take only a few days to resume the pipeline operation, keeping the impact at minimal levels.

As MRC reported earlier, Mehr Petrochemical Company (MHPC), a major petrochemical producer in Iran, resumed operations at its high density polyethylene (HDPE) plant in Assaluyeh, Iran in late March, 2021. This HDPE line with an annual capacity of 300,000 tons/year was shut unexpectedly in the third week of March after a technical glitch.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) -- Technip Energies, through its wholly-owned subsidiary in the UK (Technip E&C Limited), has been awarded a significant contract for Project Engineering and Management Services (PEMS) by Kuwait Integrated Petroleum Industries Company (KIPIC) for various projects in southern Kuwait, according to Hydrocarbonprocessing.

The contract is for six years duration and covers Project Engineering and Management Services for various potential projects in the Al-Zour complex, including the Al-Zour Refinery, Petrochemical Complex, LNG Import Facilities and other facilities belonging to KIPIC.

Stephane Mespoulhes, Vice President of Project Management Consultancy at Technip Energies commented: “We are pleased to have been awarded this contract by KIPIC which confirms our long-standing presence as an established contractor in Kuwait. This award demonstrates our leading position in Project Management Consultancy activities and confirms the ramp-up of our Technology, Products and Services business segment.”

KIPIC is responsible for operating and managing the largest grassroot integrated complex for refining, petrochemicals manufacture businesses and liquefied natural gas import facilities at Al-Zour complex.

As MRC informed earlier, Technip Energies has been recently awarded two contracts by Neste for work on the development of their renewables production platform in Rotterdam, the Netherlands, as part of the existing Partnership Agreement between Neste and Technip Energies. The first contract covers Engineering, Procurement services and Construction management (EPCM) for the modification of Neste's existing renewables production refinery in Rotterdam, the Netherlands, to enable production of Sustainable Aviation Fuel (SAF). The modifications to the refinery, an investment of approximately EUR190 million, will enable Neste to optionally produce up to 500,000 tons of SAF per annum as part of the existing capacity.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) -- ZE PowerGroup Inc.(ZE), a global leader in data integration and analytics, has joined hands with the Market Report Company (MRC) to provide customers with greater choice in petrochemical and energy market data, as per press release of the companies.

The company boasts an exceptional global reputation and caters to the unique needs of organizations across industries by introducing new data sources every week. MRC is a recognized regional PRA (Price Reporting Agency) known for preparing pricing and analytical data reports on the markets of Russia, Ukraine, and the CIS countries.

This partnership will help clients worldwide get access to accurate niche data in the chemical and energy sector of a traditionally opaque market. As a result, businesses will be able to leverage valuable market insights to make intelligent, well-informed decisions.

"We are super excited to partner with MRC and expand our global data coverage to include the markets of Russia, Ukraine, and the CIS countries. This partnership will allow our clients in the petrochemical and greater energy industries to stay on top of this evolving market. ZE is always working hard to partner with critical data providers that can add value to our client’s business interests." says Aiman El-Ramly, Chief Business Officer, ZE PowerGroup.

Ross Linford, the Managing Director at MRC Partners Ltd, has similar thoughts. He states, "Market Report Company (MRC) is delighted to be working with ZE Power Inc and know our customers will share our enthusiasm as they interact with our predictive data on ZEMA. We are excited to welcome new customers looking to navigate a volatile and under-developed commodity sector with our specialist data and insights."

Established in 1995, ZE’s sole purpose is to help clients be more efficient through information automation and superior services. ZE is the developer of ZEMA™, comprehensive data integration and analytics platform for resolving data management and business process automation challenges. By providing unrivaled data collection, analytics, curve management, and integration capabilities, ZEMA offers flexible and cost-efficient business process solutions for clients in all markets and industries.

Market Report Company (MRC) has been at the forefront of chemicals business intelligence for the past two decades. Our data-driven solutions, pricing analytics, and local market insight help industry players make more informed decisions across the petrochemicals value chain. Our regional expertise has been developed over the years, working with the companies that matter within Russia, Ukraine and the CIS (Commonwealth of Independent States) region. We provide our global supply chain customers with the market pricing, fundamentals, and data analytics they have come to depend on to understand what is really happening in one of the world’s most important petrochemical markets.
MRC

MOSCOW (MRC) -- Japanese refiners will need at least three months to resume Iranian oil imports even if the Iranian nuclear talks lead to an agreement and a lifting of sanctions, Tsutomu Sugimori, president of the Petroleum Association of Japan (PAJ) said, as per Reuters.

Sugimori, who also serves as chairman of Eneos Holdings Inc , said the company's role is to support the Tokyo Olympics as a partner since there are athletes and officials who eagerly want the Games to be held.

As MRC informed earlier, an explosion on an oxygen pipeline in a petrochemical plant in Assaluyeh on Iran's Gulf coast killed one worker, Iranian state media reported, adding that the ensuing fire had been extinguished.

As per MRC, A fire broke out at the site of Bashneft-Ufaneftekhim branch in Ufa. The fire was quickly extinguished by the operational services of the branch. No one was injured. Bashneft-Ufaneftekhim explained that a small volume of oil caught fire at the industrial site, the area of the fire did not exceed 15 sq. m. The company does not see environmental threats: constant environmental monitoring is carried out on site. The main production of the plant is operating normally.

According to MRC's ScanPlast report, Ufaorgsintez was operating with higher capacity utilisation in March, the plant's PP production totalled about 11,400 tonnes versus 9,500 tonnes a month earlier. The Ufa plant's overall PP output reached 32,800 tonnes in the first quarter of 2021, down by 3% year on year.
MRC