MOSCOW (MRC) -- Crude oil futures were lower during mid-morning trade in Asia July 15 after the impasse between Saudi Arabia and the UAE on OPEC+'s oil production quotas for August showed signs of a resolution, alleviating concerns of near-term supply shortage, reported S&P Global.
At 11:05 am Singapore time (0228 GMT), the ICE September Brent futures contract was down 74 cents/b (0.99%) from the previous close at USD74.02/b, while the NYMEX August light sweet crude contract was down 70 cents/b (0.96%) at USD72.43/b.
The overnight progress in finding a compromise to the Saudi Arabia-UAE standoff with regards to oil production quotas for August and beyond, allayed concerns of the OPEC+ - a coalition of OPEC and other oil producers - alliance sticking to the prevailing July production policy for the months ahead, which was expected to result in supply tightness.
"Crude oil's rally fizzled on signs of stronger supply. Brent crude oil prices fell after news broke early in the session that Saudi Arabia and UAE were close to a deal on increasing production," ANZ analysts said in a July 4 note.
The deadlock was due to the UAE wanting to change its production baseline within the OPEC+ pact from 3.16 million b/d to a new April 2020 baseline of 3.84 million b/d, which it argued was fair and representative of current production.
"The deal will take some time to get finalized, but it seems the UAE will be allowed to produce more output next year. It seems OPEC+ will shortly have a plan to raise output and that is welcomed news as surging demand had oil market getting too tight," Edward Moya, senior market analyst at OANDA, said in a July 15 note.
As MRC wrote previously, earlier this week, Saudi Arabia and Oman called for continued cooperation between OPEC and other allied producers to stabilise and balance the oil market.
We remind that China's crude oil imports fell 3% from January to June versus a year earlier, in the first first-half contraction since 2013, as an import quota shortage, refinery maintenance and rising global prices curbed buying. Imports totalled 40.14 million tonnes last month, data released by the General Administration of Customs showed on Tuesday, equivalent to 9.77 million barrels per day (bpd).
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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.
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