London +4420 814 42225
Moscow +7495 543 9194
Kiev +38044 599 2950
info@mrcplast.com

Our Clients

Order Informer

 
Home > News >
 

Crude oil futures rise in Asia on supply tightness

September 21/2021

MOSCOW (MRC) -- Crude oil futures were higher during mid-morning Asian trade Sept. 21, as output in the US Gulf of Mexico continued to impact supply and tightness in the European gas market, which in turn is supporting oil prices, reported S&P Global.

Now At 10:57 am Singapore time (0257 GMT), the ICE November Brent futures contract was up 62 cents/b (0.84%) from the previous close at USD74.54/b, while the NYMEX October light sweet crude contract rose 64 cents/b (0.91%) to USD70.93/b.

"Oil may draw some support in that some US Gulf outputs are still offline due to storm damages, with additional supplies to potentially come only in October," IG's market strategist Yeap Jun Rong said Sept. 21, adding that the USD73.50/b level for Brent may remain as a key support to watch and a recovery from current levels may point to a higher low formed.

Analysts have also said that higher gas prices spurred by the tightness in the European gas market has offered support to the oil market.

"European natural gas prices continued to trade higher. Gazprom yesterday booked no additional pipeline capacity via Ukraine for October, while only around a third of the capacity offered via the Yamal-Europe pipeline was booked, which has intensified concerns over tightness," ING research analysts said Sept. 21.

The tight supply in the European gas market suggests that prices are likely to remain elevated. These higher gas prices should offer some support to the oil market, with a growing potential for gas to oil switching, they added.

Over at the US Gulf of Mexico, less than a quarter of crude production remain offline, nearly three weeks after Hurricane Ida ravaged the Louisiana Gulf Coast. About 331,078 b/d of crude, or 18%, were still offline Sept. 20, according to the US Bureau of Safety and Environmental Enforcement, after Hurricane Ida shut in 95% of production at the end of August.

Despite the proportion of offline production on the decline, Shell has, however, pointed out that it will take some time to restore output to pre-Hurricane Ida levels. At the moment about 60% of the company's US offshore Gulf of Mexico output is back online. However, with serious damage sustained to a transfer facility, the remaining output is only expected to be fully restored Q1 2022.

As informed earlier, Shell said earlier this month it observed damage from Hurricane Ida to its transfer station West Delta-143 offshore facilities in the Gulf of Mexico. West Delta-143 serves as the transfer station for all production from its assets in the Mars corridor in the Mississippi Canyon area of the Gulf of Mexico to onshore crude terminals. Shell said then it was not yet safe to send personnel offshore to learn the full extent of the damage and estimate the effect on production.

We remind that in late August, 2021, US crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said. Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

We also 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.


mrcplast.com
Author:Margaret Volkova
Tags:Asia, crude and gaz condensate, propylene, ethylene, petrochemistry, Gazprom, Shell, Russia, USA.
Category:General News
|
| More

Leave a comment

MRC help

 


 All News   News subscribe