COVID-19 - News digest as of 05.08.2021

1. Crude oil futures going down on unexpected build in US crude inventories

MOSCOW (MRC) -- Crude oil futures extended decline Aug. 4 on the heels of an unexpected build in US crude inventories, reported S&P Global. NYMEX September WTI settled down USD2.41 at USD68.15/b Aug. 4, and ICE October Brent declined USD2.03 to USD70.38/b. Total US commercial crude oil stocks climbed 3.63 million barrels to 439.23 million barrels in the week ended July 30, US Energy Information Administration data showed Aug. 4. The build narrowed the deficit to the five-year average to around 6%, the smallest since the week ended June 18.
The build came as a surprise to markets that were largely expecting US inventories to continue a tightening trend.
American Petroleum Institute data released late-Aug. 3 showed a US crude draw of 879,000 barrels, while analysts surveyed by S&P Global Platts on Aug. 2 had pointed to a four-million barrel draw over the period.

MRC

MOSCOW (MRC) -- Crude oil futures extended decline Aug. 4 on the heels of an unexpected build in US crude inventories, reported S&P Global.

NYMEX September WTI settled down USD2.41 at USD68.15/b Aug. 4, and ICE October Brent declined USD2.03 to USD70.38/b.

Total US commercial crude oil stocks climbed 3.63 million barrels to 439.23 million barrels in the week ended July 30, US Energy Information Administration data showed Aug. 4. The build narrowed the deficit to the five-year average to around 6%, the smallest since the week ended June 18.

The build came as a surprise to markets that were largely expecting US inventories to continue a tightening trend.

American Petroleum Institute data released late-Aug. 3 showed a US crude draw of 879,000 barrels, while analysts surveyed by S&P Global Platts on Aug. 2 had pointed to a four-million barrel draw over the period.

The crude build comes as exports fell 590,000 b/d to 1.9 million b/d, a 12-week low, while total refinery crude demand edged 50,000 b/d higher, but still fell more than 5.5% behind the five-year average.

NYMEX September RBOB settled 2.08 cents lower at USD2.2500/b and September ULSD declined 5.23 cents to USD2.0741/gal.

The relatively modest slide in RBOB futures was likely due to a larger-than-expected 5.29 million-barrel draw in US gasoline stocks last week - the bulk of which was realized on the US Atlantic Coast. USAC stocks are now the tightest since May at 6.5% below the five-year average, out from just 0.7% the week prior.

Adding to pressure was an ADP jobs report released Aug. 4 showing US payrolls added just 330,000 jobs in July, well under market expectations of around 683,000. The official Labor Department unemployment report for July is expected Aug. 6.

"The big miss with the ADP raised concerns that the delta variant is having a bigger impact on the economy," OANDA senior market analyst Edward Moya said in a note. "The labor market recovery is extremely uneven and suggests the economy continues to struggle in matching individuals up with the current job vacancies."

The ADP report comes on the heels of data from the Institute of Supply Management release Aug. 2 showing a slowdown in US manufacturing activity, with national factory activity falling from 60.6 in June to 59.5 in July, its lowest since January.

We remind that as MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.

We also remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.

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.
MRC

MOSCOW (MRC) -- The Federal Antimonopoly Service (FAS) of Russia has approved the transfer of Gazprom neftekhim Salavat (GNS), one of the largest oil refining and petrochemical production complexes in the Russian Federation, to the management of RusGazDobyche, reported the Agency for Oil and Gas Information with reference to the head of RusGazDobycha Konstantin Makhov's statement.

He reminded that RusGazDobycha's subsidiary, Ruskhimalliance, which is the operator of the gas processing plant (GPP) of Gazprom and RusGazDobycha in Ust-Luga, had recently signed an agreement to manage GNS.

"We have received the approval of the FAS, now we are solving the last issues there, which, ... I think, we will resolve in the next few days. But in fact, we are already at "Salavat". We are already working, interacting with the management, with the plant, conducting an audit ", - K. Makhov reported on the status of the transaction.

He also added that RusGazDobycha signed a preliminary agreement with Gazprom to supply an additional 28 billion cubic meters of ethane-containing gas to Gazprom neftekhim Salavat. RusGazDobycha wants to modernize the plant, fully load its capacities, and also build a gas processing plant there so that the total capacity is comparable to the Amur gas processing plant.

Thus, the Amur GPP of Gazprom will produce 38 billion cubic meters of commercial gas for supplies to China, up to 60 million cubic meters of helium, 2.4 million tons of ethane, about 1 million tons of propane, as well as 0.5 million tons of butane and 0.2 million tons pentane-hexane fraction. It is expected to reach full capacity uitilisation in 2025.

Earlier it was noted that last year Gazprom neftekhim Salavat increased the depth of oil refining to 91.9%. Amid restrictive measures and measures to prevent the spread of a new coronavirus infection in 2020, Gazprom neftekhim Salavat's employees ensured the operation of facilities in a normal mode and fulfilled the production plan.

As MRC reported previously, GNS resumed its low density polyethylene (LDPE) production on 10 August, 2020, after scheduled maintenance works. The outage lasted slightly longer than originally planned. LDPE production capacities were shut for the turnaround on 1 July. Meanwhile, from 1 July, 2020, a one-week maintenance was also carried out at Gazprom neftekhim Salavat's high density polyethylene (HDPE) production capacities.

This year, according to ICIS-MRC Price report, Gazprom neftekhim Salavat shut its LDPE and HDPE production capacities for scheduled repairs on 20 July. The outage will be quite long and will last for 30 days. The plants' production capacities are 45,000 and 120,000 tonnes per year, respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 953,40 tonnes in the first five months of 2021, which virtually corresponds to the same figure a year earlier. HDPE shipments decreased.

Gazprom neftekhim Salavat is a subsidiary of Gazprom. The plant was founded in 1948 as Integrated Plant No. 18. Since 1999, the state block of shares in Salavatnefteorgsintez was in trust management of Gazprom, and in 2008 the specialized holding Gazprom Pererabotka became the owner of the controlling stake in the plant. OAO "Gazprom neftekhim Salavat" (formerly OAO "Salavatnefteorgsintez") is one of the leading petrochemical companies in Russia, carrying out a full cycle of processing hydrocarbon material. The list of products manufactured by the plant includes more than 140 items, including 76 grades of the main products: gasoline, diesel fuel, kerosene, fuel oil, toluene, solvent, liquefied gases, benzene, styrene, ethylbenzene, butyl alcohols, phthalic anhydride and plasticizers, polyethylene, polystyrenes, silica gels and zeolite catalysts, corrosion inhibitors, elemental sulfur, ammonia and urea, glycols and amines, a wide range of household products made of plastics, surfactants and much more.
MRC

MOSCOW (MRC) -- The Union of Plastics Converters has proposed to the Central Bank to allow the sale of large-tonnage polymers on commodity exchanges, for example, on the St. Petersburg International and National Commodity Exchanges (part of the Moscow Exchange), reported Izvestia.

The organization sent a letter to the Central Bank on 1 July , Izvestia got acquainted with it.

Since March 2020, prices of large-tonnage polymers have been constantly growing in the market, the letter says. For example, polystyrene (PS) prices had risen from Rb95/kg to just over Rb170/kg by early spring 2021, the union noted.

Such a sharp increase was caused by a shortage of domestic material on the back of a recovery in global demand, the authors of the letter emphasized. During this period, it was more profitable for producers to export material abroad due to the ratio of exchange rates, Petr Bazunov, General Director of the Union of Plastics Converters, told Izvestia.

The Central Bank considered that the sale of material on the exchange is expedient, according to the regulator's response to the union on July 30. Izvestia got acquainted with it.

The press service of the Central Bank also noted that organized trading is an effective tool for creating a competitive organized market for goods. It is on it that fair pricing can be formed, subject to certain rules.

As MRC reported earlier, in June, 2021, ZapSibNeftekhim (part of SIBUR), Russia's largest polymer production plant, began shipping its products to Latin America, Southeast Asia (Southeast Asia), Africa and South Africa. It is noted that market factors and conditions in the global market at the beginning of 2021, which led to a shortage of polymers in different regions, contributed to the expansion of the sales geography of ZapSibNeftekhim. The complex's production is also supplied throughout Russia, to the CIS countries and Europe, Turkey and China.

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.
MRC

MOSCOW (MRC) -- Technip Energies announced the successful test of its Large Scale Vortex Burner (LSV) for 100% firing of hydrogen, according to Hydrocarbonprocessing.

The innovative LSV burner was developed by Air Products and designed and applied by Technip Energies’ in various fired heater usages. The successful test demonstrates the potential use of LSV in avoiding direct CO2 emissions by substituting 100% hydrogen for methane or other fuel gases.

The LSV® burner is a cost-effective, low-NOx combustion solution. This technology has been applied successfully over the past 15 years in cracking furnace and hydrogen reformer installations, in both new or retrofitted projects. The burner can now be applied to different process heating applications and combustion air supply modes and also is suitable for a wide range of fuel gas compositions and firing configurations.

As MRC wrote previously, in June 2021, Technip Energies announced the initiation of an agreement with Agilyx Corporation, a wholly owned subsidiary of Agilyx AS and pioneer in the advanced recycling of post-use plastics. This collaboration aims to accelerate the implementation of Agilyx’s technology for the advanced recycling of post-use polystyrene (PS). Under this agreement, Technip Energies will market and license the integrated technologies of Agilyx depolymerization and Technip Energies purification technology, leveraging the expertise, resources, and global presence of respective companies. The technology is ready and available for licensing.

According to MRC's ScanPlast report, Russia's estimated consumption of PS and styrene plastics totalled 236,110 tonnes in the first five months of 2021, up by 27% year on year (172,360 tonnes). May estimated consumption was 48,880 tonnes, up by 66% year on year.
MRC