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Crude oil futures steady in Asia on infrastructure deal and outlook of moderate increase in supply

June 25/2021

MOSCOW (MRC) -- Crude oil futures were steady during the mid-morning trade in Asia June 25 following a deal on the US infrastructure package, with the market expecting only a moderate increase in OPEC+ supply August onwards, reported S&P Global.

At 11:00 am Singapore time (0300 GMT), the ICE August Brent futures contract was down 8 cents/b (0.11%) from the previous settle at USD75.48/b while the NYMEX August light sweet crude contract was down 6 cents/b (0.08%) at USD73.30/b.

On June 24, US President Joe Biden announced that a bipartisan agreement has been reached on a USD973 billion infrastructure plan, which includes more than half a trillion dollars of new spending. The announcement led to higher risk appetite in the broader financial markets, with crude also benefiting from the bullish sentiment.

Crude also remains supported by a rosy demand outlook, as vaccination rates around the world rise, and as countries roll back mobility restrictions.

Against the backdrop of rising global oil demand, the OPEC+ coalition has met with calls to raise oil production to prevent surging energy prices from undermining the global economic recovery. In a virtual meeting with OPEC Secretary General Mohammad Barkindo on June 24, Indian oil minister Dharmendra Pradhan raised concerns over inflationary pressure from increasing oil prices and made a renewed call for OPEC+ to phase out its production cuts.

OPEC+ is currently holding crude production at 6.2 million b/d below October 2018 levels and intends to taper this output cut to 5.76 million b/d in July. OPEC+ alliance's July 1 meeting is expected to provide guidance into output levels for August, and while reports have emerged that the coalition is considering tapering its production quota, most analysts expect a tempered rise of around 500,000 b/d.

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.
Author:Margaret Volkova
Tags:Asia, crude and gaz condensate, medicine, India, USA.
Category:General News
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