COVID-19 - News digest as of 19.08.2021

1. South Korean and Chinese refiners snap up US Mars crude loading in September

MOSCOW (MRC) -- South Korean and Chinese refiners have snapped up at least 5 million barrels of US Mars crude loading in September, taking advantage of lower prices in recent weeks, reported Reuters with reference to industry sources. The purchases could lift in September the volume of US crude loading for Asia, up from a 4-year low in the previous month when strong US crude prices curbed exports, Refinitiv Eikon data showed. Other grades such as West Texas Intermediate (WTI) and West Texas Light (WTL) that regularly head east are also being booked for Asia, the sources said.


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Crude oil futures in Asia continue their downward trend amid US gasoline stock build, poor demand outlook

Crude oil futures in Asia continue their downward trend amid US gasoline stock build, poor demand outlook

MOSCOW (MRC) -- Crude oil futures extended losses sustained overnight during mid-morning Asian trade Aug. 19, as concerns over the slowdown in oil demand intensified after US data showed a build in US gasoline stockpiles, while investors remained spooked by the delta variant spread, reported S&P Global.

At 10:32 am Singapore time (0232 GMT), the ICE October Brent futures contract was down USD1.03/b (1.51%) from the previous close at USD67.18/b, while the NYMEX September light sweet crude contract fell USD1.07/b (1.63%) at USD64.39/b.

Total US gasoline inventories climbed 700,000 barrels to 228.17 million barrels in the week ended Aug. 13, the Energy Information Administration data released late Aug. 18 showed, snapping four consecutive weekly draws and narrowing the deficit to the five-year average to around 3%.

The build ran counter to market expectations. American Petroleum Institute data released late Aug. 17 showed US gasoline stocks down 1.2 million barrels, while analysts surveyed by S&P Global Platts on Aug. 16 had called for a 2.3 million-barrel decline over the period.

Coming at the tail end of the peak driving season, the news sent both oil benchmarks slumping 1.1%-1.7% overnight. Reports of a 3.23 million-barrel draw in US commercial crude inventories over the same period to 435.54 million barrels did little to offset investor pessimism.

"It appears that the only modestly bearish data point from yesterday's report was that gasoline inventories increased by 696,000 barrels due to a slight decline in implied demand," ING analysts Warren Patterson and Wenyu Yao said.

"Given yesterday's price action, the market is clearly more focused on the global demand outlook than EIA weekly numbers," they added.

COVID-19 case numbers in the US remained stubbornly high despite the government's ongoing vaccination drive. The country recorded 141,893 new cases as of Aug. 17, most recent data from the US Centers for Disease Control and Prevention showed, while the seven-day moving average stood at 130,121 cases.

Nonetheless, ING's Patterson and Yao noted that one bright spot for the supply outlook was the increasingly unlikely return of Iranian oil in the near term, given the lack of progress in nuclear talks.

As MRC informed earlier, crude oil stockpiles fell modestly last week, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.

We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
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July exports of diesel hit 10-month low in China as refiners run out of export quotas

July exports of diesel hit 10-month low in China as refiners run out of export quotas

MOSCOW (MRC) -- China's diesel exports in July plunged 41% from a month ago as refiners neared the end of the first batch of 2021 refined fuel export quotas, while a drop-off in domestic fuel supplies encouraged refiners to prioritise local demand, said Hydrocarbonprocessing.

Diesel shipments were 1.39 million tonnes last month, hitting the lowest level since September 2020, data from the General Administration of Customs showed on Wednesday. That was down from 2.36 million tonnes in June but still well above 550,000 tonnes in July last year.

Gasoline exports in July also plunged 49% from a month earlier to only 740,000 tonnes, the lowest point in 14 months. Jet kerosene exports were 660,000 tonnes in July.

China granted 29.5 million tonnes of refined fuel products export quotas in the first batch for 2021. In the first six months, the country sold 26.29 million tonnes of diesel, gasoline and jet kerosene to overseas market.

Meanwhile, Beijing from mid-June imposed hefty taxes on imports of light cycle oil (LCO), mixed aromatics and diluted bitumen, aiming to curb imports it blames for worsening a fuel surplus and polluting the environment.

China's daily crude throughput last month fell to the lowest since May 2020. Last week, China slashed export quotas for refined fuels for the second batch of quotas issued for 2021 by 73% year-on-year to 7.5 million tonnes, pointing to low fuel exports in coming months.

The customs data on Wednesday also showed China's liquefied natural gas (LNG) imports in July were 5.67 million tonnes, up 14% from a year earlier, buoyed by increasing demand from industrial and power generation sectors.

As per MRC, China's daily crude throughput last month fell to the lowest since May 2020 as independent plants slashed production amid a tighter quotas, high inventories and weakening profits. Last month's processing volumes were 59.06 million tonnes, or 13.9 million barrels per day (bpd), 0.9% below the same month of 2020, data from the National Bureau of Statistics (NBS) showed on Monday. That was the first year-on-year decline since March last year when coronavirus hammered Chinese fuel demand, and the July level was down 6% from off June's record at 14.8 million 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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
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Seven people killed at Shell gas project site in Nigeria

Seven people killed at Shell gas project site in Nigeria

MOSCOW (MRC) -- Gunmen killed a police officer and six employees of a Nigerian oil and gas services contractor during an attack on buses transporting workers to a Shell project site in the southeastern state of Imo, reported Reuters with reference to police's statement.

Attacks on oil and gas facilities have long been a problem in Nigeria, where the multi-billion dollar industry sits alongside impoverished communities that have seen little benefit from it. In this case, the motive was unclear.

The Nigerian arm of Shell, SPDC, confirmed that unknown gunmen had attacked a convoy of buses taking staff of its contractor, Lee Engineering, to its Assa North Gas development project site in the Ohaji area of Imo State on Monday morning.

"We have since shut down the project site while the incident has been reported to the police for investigation. SPDC is working with the contractor and supporting the police through a thorough investigation of the incident and to prevent a recurrence," it said in a statement.

Imo State police spokesman Michael Abattam said efforts were ongoing to arrest the perpetrators.

The company is involved in the installation and construction of a gas primary treatment facility and the supply of a gas turbine generators and a waste heat recovery system, according to its website.

The oil and gas industry, located in the Niger Delta in the south of the country and offshore in the Gulf of Guinea, has been a focal point for violence for several decades. The region has a history of kidnappings, inter-communal conflicts, armed insurgency, piracy and oil smuggling.

As MRC informed earlier, Loadings of Nigeria's key crude grade Forcados are on force majeure due to some operational issues at the export terminal, according to Shell's statement Aug. 16. Force majeure was declared effective Aug. 13 due to "the curtailment of production and suspension of export operations as a result of some sheen noticed on the water around the loading buoy," Shell Petroleum Development Company of Nigeria Ltd. said in a statement.

We remind that Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
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BASF raises September polyalcohol prices in Americas

BASF raises September polyalcohol prices in Americas

MOSCOW (MRC) -- BASF, the world's largest petrochemical company, has announced price increases for select polyalcohols in North and South America, as per the company's press release.

The price rise is effective 1 September 2021 or as contracts allow. No reason for the nominated price hike has been given.

Thus, prices for polycaprolactone, epsilon-caprolactone, and 1,6-hexanediol (HDO) flake will grow by USD0.20/pound (lb) in North America and by USD441/metric ton in South America, it says. The price of 1,5-pentanediol will rise by USD0.15/lb in North America and USD331/metric ton in South America, whereas prices for neopentyl glycol (NPG) and 1,6-HDO molten will go up in North America by USD0.10/lb and in South America by USD220/metric ton.

The various products are used in applications including coatings, plastics, epoxy systems, resins for adhesives and sealants, and high-performance polyurethane, according to BASF.

As MRC reported earlier, Lotte Chemical, a major Korean chemical company, has produced polypropylene (PP) required for medical applications using BASF’s Irgastab, a non-discoloring processing stabilizer. With the rollout of COVID-19 vaccinations worldwide, the need for syringes made from PP has increased exponentially.

According to MRC's ScanPlast report, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
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