Crude oil reaches two-year high on OPEC+ discipline and stronger demand

Crude oil reaches two-year high on OPEC+ discipline and stronger demand

MOSCOW (MRC) -- Oil extended gains on Friday, with Brent topping USD72 a barrel for the first time since 2019, as OPEC+ supply discipline and recovering demand countered concerns about a patchy COVID-19 vaccination rollout around the globe, reported Reuters.

The Organization of the Petroleum Exporting Countries and allies on Tuesday said they would stick to agreed supply restraints. A weekly supply report on Thursday showed U.S. crude inventories dropped more than expected last week.

Oil extended gains after US figures showed nonfarm payrolls increased by 559,000 jobs last month. The US dollar weakened after the report, making oil cheaper for holders of other currencies and lending support to oil prices.

Brent crude rose 58 cents, or 0.8%, to settle at USD71.89 a barrel, after touching USD72.17, its highest since May 2019. US West Texas Intermediate crude rose 81 cents, or 1.2%, to settle at USD69.62. The session high was USD69.76, its highest since October 2018.

Oil prices drifted higher after US energy firms last week cut the number of oil and natural gas rigs operating, for the first time in six weeks, data from energy services firm Baker Hughes showed. Brent rose about 3% on the week while US crude notched gains of nearly 5%. It is the second week of gains for both contracts.

Also boosting oil last week was a slowdown in talks between the United States and Iran over Tehran's nuclear programme, which reduced expectations of a return of Iranian oil supply.

"Energy markets are locked in on Iran nuclear talks that should pick up next week," Edward Moya, senior market analyst at OANDA said.

"The fifth round of negotiations will heat up next week and that should keep oil prices supported as Tehran will stick to their red lines for restoring the nuclear deal."

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

ADNOC and TAQA signed an agreement to construct the utilities facility at TA'ZIZ in Ruwais

ADNOC and TAQA  signed an agreement to construct the utilities facility at TA'ZIZ in Ruwais

MOSCOW (MRC) -- Abu Dhabi National Oil Company (ADNOC) and Abu Dhabi National Energy Company PJSC (TAQA) have signed an agreement to construct the utilities facility for TA’ZIZ, the new world-scale chemicals production hub and globally competitive industrial ecosystem currently under development at Ruwais, Abu Dhabi in the United Arab Emirates (UAE), said Hydrocarbonprocessing.

This agreement brings together two of Abu Dhabi’s industrial champions, using the expertise and skills of both TAQA and ADNOC to enhance the attractiveness of TA’ZIZ projects and strengthen the value proposition for investors.

TA’ZIZ will accelerate the UAE’s broader economic growth and industrial diversification, with initial chemicals production expected in 2025. Opportunities are available for local and international investors to participate across the value chain, including light manufacturing and services. Under the terms of the utilities facility agreement, ADNOC and TAQA will jointly develop the power, steam, cooling, demineralized and waste water services to enable chemicals projects within the TA’ZIZ ecosystem.

Mr Khaleefa Al Mheiri Acting CEO, TA’ZIZ, said: “ADNOC’s agreement with TAQA is the next milestone in the development of TA’ZIZ, as we continue to grow a globally competitive industrial ecosystem and highly attractive and competitive investor value proposition. Through the partnership between ADNOC and TAQA and related enabling investments in TA’ZIZ, we are well-placed to further strengthen our position as a world-scale chemicals and industrial hub and top destination for foreign direct investment, leveraging technology to further grow the UAE’s advanced manufacturing base.”

Mr. Farid Al Awlaqi, Executive Director of Generation at TAQA Group, said: “We look forward to partnering with ADNOC on such an important project for Abu Dhabi that will be serving a multitude of industries, with both local and international market players. As a fully integrated utilities company, based here in Abu Dhabi, being able to provide such critical services for TA’ZIZ is at the core of what we do at TAQA. In addition to supporting critical infrastructure development in our home market, this project advances the economic vision for the Emirate and the UAE.”

TA’ZIZ will catalyze the development of manufacturing and supply chain activities at Ruwais. Manufacturers will locate in the TA’ZIZ Light Industrial Zone, adjacent to the TA’ZIZ Industrial Chemicals Zone, off-taking TA’ZIZ chemicals to make value-added products for local and international markets. Suppliers will cluster in the TA’ZIZ Industrial Services Zone, to meet the growing needs for services in the Ruwais industrial area.?

Since its launch in November 2020, TA’ZIZ has made significant progress. Development activities at the site have moved forward, with land and marine surveys already completed. Considerable interest has been received from local and international investors in opportunities across the entire ecosystem and value chain, and agreements with the first phase of investors are nearing finalization.

Contracts have been awarded for the first stages of development for the TA’ZIZ site, and work is already underway. This includes geotechnical and topographical surveys, a marine bathymetric survey and health, safety and environment impact assessments, which have already been completed. The surveys will enable civil engineering works to prepare the TA’ZIZ site for construction as well as dredging for an entirely new port facility.

Tenders for the Front-End Engineering and Design (Pre-EED/FEED) of the seven TA’ZIZ chemicals derivatives projects have been awarded. Final investment decisions for the projects and awards of related EPC contracts are being targeted for 2022.

TA’ZIZ enjoys strong synergies with ADNOC’s integrated downstream and industry assets for feedstocks and services, as well as advantaged maritime, land and air logistics and transport links. The TA’ZIZ site is adjacent to the Ruwais Industrial Complex and enjoys a favorable location at the crossroads of east-west trade flows and routes to the UAE’s target markets, with a third of the world’s population accessible within four hours by plane and short sailing distances. The city of Ruwais is today well-positioned to further grow and flourish with the influx of families that seek to build careers and lives in what has become a dynamic, highly attractive residential community.

As MRC reported previously, in early May, 2020, Abu Dhabi National Oil Company (ADNOC) began a gradual restart of its Ruwais oil refinery complex after a scheduled maintenance shutdown. The Ruwais complex, which has capacity of 835,000 barrels per day, was shut down early this year, the ADNOC spokesman said.

And in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

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

US weekly refinery capacity utilisation grows to highest since February 2020

US weekly refinery capacity utilisation grows to highest since February 2020

MOSCOW (MRC) -- US weekly refinery utilisation rates increased to 88.7% last week, which is the highest level since February 2020, reported Reuters with reference to US Energy Information Administration data released.

Midwest weekly refinery utilization rates grew to 91.5%, also the highest since February 2020, the data showed.

As MRC informed earlier, Royal Dutch Shell is selling its 90,000 barrel-per-day (bpd) Mobile, Alabama refinery to specialty refiner Vertex Energy for USD75 million plus the cost of hydrocarbon inventory. Shell and Vertex will have crude supply and product offtake agreements, according to the companies.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

Eneos resumes operations of CDU at its Kashima refinery

Eneos resumes operations of CDU at its Kashima refinery

MOSCOW (MRC) -- Japan's largest refiner Eneos Corp (formerly known as JXTG Nippon Oil & Energy) has restarted the 168,000-bpd No.1 crude distillation unit (CDU) at its Kashima refinery, east of Tokyo, after it was shut on May 11 due to system trouble, reported Reuters with reference to a company spokeswoman's statement.

The refiner, which is a unit of Eneos Holdings Inc, plans to restart the 105,000-bpd No.3 CDU at its Mizushima-B refinery, western Japan, in early June, she said. The CDU was shut on Feb. 25 for turnaround.

It plans to shut down the 145,000 CDU at its Sendai refinery in northern Japan for planned maintenance in early June, the spokeswoman said.

The company's 141,000-bpd Sakai refinery in western Japan is expected to restart in late June after maintenance, she added.

Eneos plans to restart the 136,000 bpd CDU at its Oita refinery in southwestern Japan in August, she said. The Oita CDU, which was shut on May 12 last year for scheduled maintenance, has been shut due to a fire later that month.

As MRC wrote previously, ENEOS restarted its Sendai refinery in northeast Japanon 18 May, 2021. This refinery was hit by an earthquake on 1 May, 2021. Besides, on 18 May, the company shut down its Sakai refinery in western Japan for maintenance.

We remind that ENEOS Corporation restarted its naphtha cracker in Kawasaki on 1 February 2021. The company shut this cracker with an annual capacity of 515,000 tons/year of ethylene, 300,000 tons/year of propylene, and 105,000 tons/year of butadiene on 4 December, 2020, for repairment after a technical issue reported at the butadiene separation unit and initially planned to resume operations on 28 December, 2020.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

Japan's largest refiner JXTG Nippon Oil & Energy was renamed ENEOS Corporation on 25 June, 2020, as part of a wider re-organization of the parent company JXTG Holdings. The move, which also involved renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, 2019. JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.
MRC

Russian oil refining capacities will be reduced by 19.5% in July

Russian oil refining capacities will be reduced by 19.5% in July

MOSCOW (MRC) -- Russia's offline oil refining capacity is expected to decline by 19.5% month-on-month to 2.866 million tonnes in July, according to Refinitiv Eikon data and Reuters calculations, said Hydrocarbonprocessing.

The offline capacity has been revised up this month, by 12.6% from the previous plan to 3.560 million tonnes.

The revision follows adjustments of maintenance schedule by some refineries.

As MRC informed earlier, crude oil futures were lower during mid-morning trade in Asia June 4 as the market used mixed data from the Energy Information Administration as an excuse to lock in profits following the recent surge in oil prices, while a stronger dollar provided further headwinds for the market. At 11:06 am Singapore time (0306 GMT), the ICE Brent August contract was down 26 cents/b (0.36%) from the previous settle at USD71.05/b, while the July NYMEX light sweet crude contract was down 19 cents/b (0.28%) at USD68.62/b.

As per ICIS-MRC Price Report, Ufaorgsintez (UOS, Bashneft’s petrochemical asset) has shut down operations at some of its low density polyethylene (LDPE) production capacities for a scheduled turnaround. The plant"s customers said UOS shut its second LDPE line (158 grade and 153 grade polyethylene - PE) for a scheduled maintenance on 1 June. The outage of the second PE line will be short and will take only a week. The first LDPE line (108 grae PE) will be shut for scheduled maintenance works in September.


MRC