Crude oil futures rise in Asia supported by recovery in global oil demand

Crude oil futures rise in Asia supported by recovery in global oil demand

MOSCOW (MRC) -- Crude oil futures rose during mid-morning Asian trade June 21 as markets continued to price in a recovery in global oil demand, while keeping an eye on the recently resumed Joint Comprehensive Plan of Action negotiations, reported S&P Global.

At 11:28 am Singapore time (0328 GMT), the ICE August Brent futures contract was up 47 cents/b (0.64%) from the previous settle at USD73.98/b, while the NYMEX WTI July light sweet crude contract was up 55 cents/b (0.77%) at USD72.19/b.

This morning's rise extends the uptrend from that of last week ended June 18, during which the Brent and NYMEX light sweet crude markers rose 1.13% and 1.03% to close at USD73.51/b and USD71.64/b, respectively.

The uptrend in the oil markets come despite hawkish signals from the US Federal Reserve, which is pushing the dollar higher, and can be attributed to markets buying into the global demand recovery narrative.

With rising vaccination rates, and easing mobility restrictions, the US and Europe are at the forefront of this recovery, and analysts have said that the record crude throughput seen in China in May is likely to persist until winter.

ANZ analysts have also noted nascent signs of improvement in India's downstream products demand, as parts of the country relax lockdown restrictions following a sustained downtrend in COVID-19 infections.

In other news, negotiations over the Joint Comprehensive Plan of Action have resumed in Vienna on June 20 after the election of Ebrahim Raisi as Iran's president. Raisi had earlier said that he is committed to the JCPOA.

Raisi's top energy adviser, Alireza Zeyghami, a former deputy oil minister, told S&P Global Platts that under Raisi, Iran would seek a quick return to its pre-sanctions crude production of near 4 million b/d, with or without an agreement. Many buyers of Iranian crude, however, will await the restoration of the JCPOA before purchasing Iranian crude, as they will not want to risk incurring sanctions penalties.

We remind that as MRC informed 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

Baystar to start up its new HDPE plant in Texas in Q1 2022

Baystar to start up its new HDPE plant in Texas in Q1 2022

MOSCOW (MRC) -- Bayport Polymers LLC (Baystar) plans to start up its new polyethylene (PE) plant in Pasadena, Texas in the first quarter of 2020, reported S&P Global.

The new plant with a production capacity of 625,000 mt/year of high density polyethylene (HDPE) is now under construction, which began in 2019. The contract for the engineering, procurement and construction of the new unit had been awarded to McDermott, said the company on its site.

It will use Borstar technology and more than double the company's site’s PE capacity to 1.1 mt/year after the start-up.

The HDPE plant in Pasadena will receive feedstock from Baystar's cracker in Port Arthur, a joint venture of France's Total and Austria's Borealis, with a capacity of 1 million mt/year, which is in the progress of start-up at the moment.

According to MRC's ScanPlast report, Russia's overall HDPE production totalled 653,500 tonnes in the first four months of 2021, up by 9% year on year. At the same time, only one Russian producer increased its HDPE output.

Bayport Polymers LLC (Baystar) was created as a joint venture in 2018 between three established petrochemical industry leaders, Total S.A. (Total), Borealis Holdings LLC and NOVA Chemicals.
MRC

Chevron temporarily shut offshore oil and gas platforms in ahead of Gulf of Mexico storm

Chevron temporarily shut offshore oil and gas platforms in ahead of Gulf of Mexico storm

MOSCOW (MRC) -- Chevron temporarily shut in production June 18 from two offshore Gulf of Mexico oil and gas platforms and evacuated some staff, ahead of a weather system that was expected to strengthen into a tropical storm and make landfall in southeast Louisiana, reported S&P Global.

Other producers in the Gulf, including BP, Shell and W&T Offshore, said they were monitoring the track of Potential Tropical Cyclone Three, but as of early afternoon had not yet evacuated any staff from platforms or shut in any offshore output. Later in the day, Shell said no crew-change flights were scheduled out of Houma and marine operations would remain limited in areas affected by the storm and elevated seas.

With the storm tracking well east of gas liquefaction facilities in southwest Louisiana and southeast Texas, producers there did not expect any impacts to export operations. Officials at Cheniere Energy, the biggest US LNG exporter with facilities at Sabine Pass in Louisiana and Corpus Christi in Texas, and Freeport LNG, which operates a liquefaction facility south of Houston, said they would continue to monitor the storm.

In Chevron's case, it wasn't taking any chances.

In preparation for the tropical weather, the company transported all non-essential personnel from the Big Foot, Jack/ St. Malo and Tahiti platforms. All personnel from its Genesis facility were also moved onshore, spokesman Tyler Kruzich said in an email responding to questions.

While production was temporarily shut-in at the Jack/ St. Malo and Tahiti platforms, output at other Chevron-operated Gulf of Mexico assets remained at normal levels, Kruzich said. Production at Jack/ St. Malo and Tahiti was expected to return to full levels over the weekend, Kruzich said.

Louisiana refiners in the path of the storm were also monitoring the situation.

"Phillips 66 is closely monitoring Potential Tropical Cyclone Three in the Gulf of Mexico," said spokesperson Allison Stowe. "Based on the storm's projected path, our Alliance Refinery in Belle Chasse, Louisiana, has activated its storm preparedness plan and remains focused on maintaining safe and reliable operations. There's no impact to operations at this time."

As MRC wrote previously, Chevron Corp has restarted the 112,229 barrel-per-day (bpd) Pasadena, Texas, refinery night after completing a multi-unit overhaul that was extended because of the COVID-19 pandemic. The entire refinery was shut from mid-April, 2020, until mid-July, 2020 with the last units returning to production on Tuesday, 14 July. The overhaul was originally to finish in mid-June, but was extended to mid-July.

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.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC

Chevron Lummus awarded contract for renewable diesel and sustainable aviation fuel project in Iowa

Chevron Lummus awarded contract for renewable diesel and sustainable aviation fuel project in Iowa

MOSCOW (MRC) -- Chevron Lummus Global LLC (CLG) and Applied Research Associates, Inc. (ARA) have been awarded a technology contract by ReadiFuels-Iowa, LLC for their renewable diesel and sustainable aviation fuel (SAF) project in Sioux Center, Iowa, according to Hydrocarbonprocessing.

The scope of the project includes the technology license, basic engineering, catalyst supply and proprietary equipment.

The jointly developed CLG and ARA Biofuels ISOCONVERSION technology will help ReadiFuels-Iowa produce sustainable aviation fuel, renewable diesel, and renewable naphtha that are indistinguishable from petroleum-based fuels. The plant will process used cooking oil and distiller's corn oil to produce approximately 36 million gallons of renewable fuels annually. ReadiFuels-Iowa also plans to process yellow grease, brown grease, animal fats, non-food energy crop oils and algal oil in the future while employing the Biofuels ISOCONVERSION technology.

Based on CLG's best-in-class hydroprocessing technology and ARA's patented Catalytic Hydrothermolysis process, the Biofuels ISOCONVERSION process can significantly reduce greenhouse gas emissions when compared to conventional refining processes. In addition, the novel approach produces 100% drop-in fuels from renewable sources that meet petroleum specifications without blending.

As MRC informed earlier, in May 2021, CLG announced the successful startup of a 100% renewable base oil unit in Novvi's Deer Park, Houston facility that employs CLG's patented state-of-the-art ISODEWAXING catalyst and technology. Chevron, one of the joint venture parents of CLG, is an equity partner in Novvi LLC (Novvi), a California-based company that engages in the development, production, marketing, and distribution of high-performance base oils from renewable sources.

We remind that in September 2020, Chevron Phillips Chemical, part of Chevron Corporation, deferred a final investment decision on a USD8 billion joint venture petrochemical complex project along the US Gulf Coast that was expected in 2021. The project, in partnership with Qatar Petroleum (QP), was announced in July 2019. It is slated to include a 2 million mt/year cracker and two 1 million mt/year high density polyethylene (HDPE) plants. The FID delay will also push the original target startup date past 2024.

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.

Headquartered in San Ramon, California, Chevron Corporation is the the second-largest integrated energy company in the United States and among the largest corporations in the world. Chevron is involved in upstream activities including exploration and production, downstream activities including refining, marketing and transportation, and advanced energy technology. Chevron is also invested in power generation and gasification processes.
MRC

Lukoil to invest in petrochemicals

Lukoil to invest in petrochemicals

MOSCOW (MRC) -- Russia's second-largest oil producer Lukoil plans to invest USD3 billion in production of petrochemicals within the next 6 years, said the company's head, Vagit Alekperov, as per Reuters.

He was speaking at the launch of an isomerisation unit at the NORSI oil refinery that is part of Russia's drive to improve the quality and ecological standards of the fuel.

Lukoil has put the unit's annual production capacity at 800,000 tonnes. It will help Lukoil to boost production of gasoline by 400,000 tonnes per year.

According to Refinitiv data, the refinery processed 11.161 million tonnes of crude oil in 2020. It produced 3.317 million tonnes of gasoline, 3.158 million tonnes of diesel and 2.412 million tonnes of fuel oil. Lukoil was not immediately available for comment.

As MRC informed earlier, Stavrolen (Budennovsk, part of Lukoil), a major polyolefins producer in the Russian Federation, plans to upgrade its technical equipment and to increase its production of polyethylene (PE) and polypropylene (PP) as part of modernization.

As reported earlier, in the first week of September 2020, Stavrolen resumed PP production after a forced and long outage due to technical problems. In fact, the plant did not produce PP since 16 July.

According to MRC's ScanPlast report, Stavrolen produced slightly over 11,000 tonnes of PP in April versus 10,700 tonnes a month earlier. The Budenovsk plant"s overall output of propylene polymers reached 42,900 tonnes in the first four months of 2021, up by 4% year on year.

Lukoil is one of the leading vertically integrated oil companies in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil company worldwide by the proven hydrocarbon reserves. Lukoil"s structure includes one of the largest Russian petrochemical plant - Stavrolen.

Stavrolen, Lukoil's subsidiary, is Russia's second largest high density polyethylene (HDPE) producer after Kazanorgsintez and the fifth largest PP manufacturer. Stavrolen"s HDPE and PP production capacities are 300,000 tonnes and 120,000 tonnes per year, respectively, the plant also produces 80,000 tonnes of benzene and 50,000 tonnes of vinyl acetate per year.
MRC