Crude oil futures steady in Asia amid softening demand due to resurgence of COVID-19 cases across the globe

Crude oil futures steady in Asia amid softening demand due to resurgence of COVID-19 cases across the globe

MOSCOW (MRC) -- Crude oil futures were steady during mid-morning trade in Asia July 13, with market sentiment bogged down by a resurgence of COVID-19 cases across the globe that could slow economic recovery, while the OPEC+ alliance remained unable to reach a consensus on reducing production cuts for August and beyond, reported S&P Global.

At 10:24 am Singapore time (0224 GMT), the ICE September Brent futures contract was up 16 cents/b (0.21%) from the previous close to USD75.32/b, while the NYMEX August light sweet crude contract was up 17 cents/b (0.23%) at USD74.27/b.

"Oil looks like it is stuck between opposing forces -- on one hand, there is the slowing down of recovery, particularly in Asia, and on the other hand, there are expectations that OPEC+ will come up with a (production) deal to maintain prices," Jeffery Halley, senior market analyst at OANDA, told S&P Global Platts July 13.

Concerns of softening demand weighed on market sentiment after data from the US showed a spike in COVID-19 cases in the week ended July 11, reflecting that the path to demand recovery may not be smooth sailing.

"The robust crude demand outlook is starting to take a hit as many countries continue to struggle with the more infectious Delta variant. Even the US is seeing a surge as low vaccinated states are behind the 47% increase in cases over the previous week," said Edward Moya, senior market analyst at OANDA in a July 13 note.

Furthermore in Asia, countries continue to implement lockdown measures to combat the resurgence of the virus, further dampening the global demand outlook for the near term.

In the UK, rising counts of COVID-19 cases are casting a shadow over the optimism surrounding the re-opening of the country, which is expected to continue as planned on July 19.

Meanwhile, the OPEC+ alliance remains unable reach an agreement on the reduction on production cuts for August and the months ahead, resulting in the bloc defaulting to sticking to current production quotas that could result in oil supply tightness, providing some support to prices.

Meanwhile, 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

COVID-19 - News digest as of 13.07.2021

1. US petroleum inventories fallen below the pre-pandemic five-year average

MOSCOW (MRC) -- US petroleum inventories have fallen below the pre-pandemic five-year average with consumption accelerating but crude producers slow to respond to rising prices, signalling more supply is needed, reported Reuters. Total stocks of crude and refined products outside the strategic petroleum reserve fell by 10 million barrels last week and are now down by 188 million barrels compared with the same point a year ago. Total stocks have fallen in 38 out of the last 52 weeks as OPEC+ and US shale firms limit crude production even as product consumption recovers.

MRC

Neste launches fuel, produced from 100% renewable raw materials in Belgium

Neste launches fuel, produced from 100% renewable raw materials in Belgium

MOSCOW (MRC) -- Neste launched Neste MY Renewable Diesel, in the Belgian market. The fuel, produced from 100% renewable raw materials, is brought to the Belgian market in collaboration with the channel partner EG Group, said Hydrocarbonprocessing.

Neste MY Renewable Diesel enables customers to reduce greenhouse gas emissions by up to 90% over the fuel’s life cycle compared to fossil diesel. “This expansion is another important step in the execution of our growth strategy globally. We are very excited to expand our renewable diesel offering in Europe and especially in Belgium, a country which is at the heart of Europe. We firmly believe that all solutions are needed to reduce transportation-related emissions and support the sector’s contribution to the EU-level target of reaching carbon-neutrality by 2050,” says Peter Vanacker, President and CEO at Neste.

“With the use of Neste MY Renewable Diesel, our customers can reduce their greenhouse gas emissions in an instant. Neste MY Renewable Diesel is a sustainable alternative to fossil diesel, and its use does not require any modifications to existing engines, vehicles or fuel distribution infrastructure. We are committed to supporting our customers to reduce greenhouse gas emissions by at least 20 million tons annually by 2030,” adds Carl Nyberg, Executive Vice President for Neste’s Renewable Road Transportation business unit.

“We are excited to expand our cooperation with Neste. Since the joint launch of Neste MY Renewable Diesel in the Netherlands, we offer Neste MY Renewable Diesel B2B home base deliveries and to B2B and private customers via our fuel stations. Following the success in the Netherlands, we are looking forward to entering the Belgian market and supporting the customers to reduce their greenhouse gas emissions immediately,” says Jurgen Artz, EG Fuel Director - Europe from EG Group.

The launch follows the successful introduction of Neste MY Renewable Diesel on the Dutch market in October 2019. The fuel is currently available at more than 100 stations throughout the Netherlands and more than 500 locations worldwide. Besides Belgium, Neste MY Renewable Diesel is available for customers in the Netherlands, Finland, Sweden, Estonia, Latvia, Lithuania and the United States in California and Oregon.

Growing availability of renewable diesel and sustainable aviation fuel Neste’s Rotterdam refinery together with the company’s Singapore refinery, are the world’s biggest and most advanced renewable diesel and renewable products refineries. The total annual production capacity of Neste’s renewable diesel and other renewable products is currently 3.2 million tons, and by the first quarter of 2023 it will increase to close to 4.5 million tons.

As per MRC, Neste is committed to reaching carbon neutrality in its production by 2035. As part of this effort, Neste aims for 100% renewable electricity use globally by 2023. In order to proceed with this target, Neste will increase the use of renewable electricity at its Porvoo refinery and has signed a new wind power agreement with a wind power company Ilmata. Renewable electricity produced by wind power is one of the key ways to reduce greenhouse gas emissions* related to the electricity purchases of production facilities.

As MRC reported earlier, in May 2021, Neste, Mitsui Chemicals, Inc. and Toyota Tsusho Corp. announced they are joining forces to enable Japan’s first industrial-scale production of renewable plastics and chemicals from 100% bio-based hydrocarbons. In this collaboration, Mitsui Chemicals will use Neste RE, 100% bio-based hydrocarbons produced by Neste, to replace a part of the fossil feedstock in the production of a variety of plastics and chemicals at its crackers within Osaka Works during 2021.

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

Loan tied to troubled St. Croix refinery plunges in value

Loan tied to troubled St. Croix refinery plunges in value

MOSCOW (MRC) -- A USD440 million loan tied to the now-idled Limetree Bay refinery in St. Croix has lost nearly 30 percent of its value amid a serious cash crunch that could leave a number of U.S. mutual funds holding the debt with losses, said Hydrocarbonprocessing.

The loan is backed by revenue from oil storage operations on the 1,500-acre (600-hectare) complex on the Virgin Islands. But those operations lost their biggest customer this past month when the refinery said it would shut indefinitely because of financial problems and pollution woes that drew enforcement action from the U.S. Environmental Protection Agency.

Bid prices on the loan backed by Limetree Bay Terminals LLC have dropped below 70 cents on the dollar this week, down from a three-month high of 97 cents, according to Refinitiv data. The loan matures in 2024 and several mutual funds hold slices of it, according to filings with the U.S. Securities and Exchange Commission.

As a result of the closure, the storage and terminal operations will lose USD52 million of expected operating revenue in fiscal 2021, according to analysts at Moody's Investors Service. The rating agency downgraded the loan to "Caa1" with a negative outlook.

The terminal stopped making payments to the refinery in mid-May after the EPA ordered all operations at the adjacent refinery to pause for a period of up to 60 days. "Without the refinery as a customer, the expected turnaround in credit metrics and material excess cash flow generation in 2021 becomes unlikely," Moody's said in a June 28 research note.

As per MRC, imports of petroleum products-gasoline, distillate, and other products into the East Coast region of the United States increased in March 2021. Rising imports resulted from lower domestic supply, higher demand, and higher domestic petroleum product prices compared with prices in Europe. In March, East Coast petroleum product imports averaged 1.4 million barrels per day (b/d). In addition, East Coast gasoline imports averaged 737,000 b/d, the highest March level since 2009, and East Coast distillate imports averaged 421,000 b/d, the highest March level since 2003.

We remind that most units were shut on Sunday night and Monday morning (15-16 February) at Marathon Petroleum Corp's 585,000 barrel-per-day Galveston Bay Refinery in Texas City, Texas, as temperatures plunged due to a Arctic cold front reaching the Gulf Coast. They resumed operations in the first half of March.

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

POLYPLASTIC increases supplies of polymer compounds to Poland

MOSCOW (MRC) - R&P POLYPLASTIC, the largest Russian manufacturer of thermoplastic composite materials, has begun regular deliveries of Armamid PA6 SV 15-1E compound under the Export Fast and Furious program, the company said.

The first batch of 10 tons was shipped in April, and in July the delivery volume was doubled and amounted to 20.5 tons. It is noted that the processing of the first batch of materials by SPE "POLYPLASTIC", received in the spring, confirmed the high quality of the products, so the end client doubled the request. Parts of industrial equipment are produced from the Russian compound in Poland. Impact-resistant glass-filled Armamid PA6 SV 15-1E allows to manufacture products by injection molding.

The material is distinguished by increased values ??of mechanical properties, resistant to the action of hydrocarbons - for example, kerosene, gasoline, diesel fuel, etc., as well as mineral and synthetic oils, concentrated and weak alkalis, weak acids.

"Having established regular deliveries of Armamid PA6 SV 15-1E to Poland, we are not satisfied with what has already been achieved. Today the company is negotiating with partners to bring another material based on polyamide-6 to the Polish market, and they are moving forward quite successfully. that Russian compounds are quite competitive on the European market, "notes Pavel Kruglov, General Director of Trading House Polyplastic, an authorized commission agent of R&P POLYPLASTIC.

Earlier it was reported that RPC "POLYPLASTIC" plans to modernize 50% of production lines by 2025 in terms of automation of the control system and traceability of production process data. NPP "POLYPLASTIC" last year increased its sales profit by 9%. At the same time, it is noted that despite the global economic turmoil caused by the coronavirus pandemic, the company maintained its sales volume at the 2019 level.

Research and Production Enterprise "POLYPLASTIC" specializes in the production of thermoplastic composite materials and polymer raw materials for processing by injection molding, injection molding and extrusion and occupies a leading position in the Russian market of compounds based on thermoplastics. The company is in the TOP-10 among European compounders. The total production capacity of the enterprise is more than 115 thousand tons per year.
MRC