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

July 14/2021

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.


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