Crude oil futures rise in Asia amid bullish fundamentals an supply restrictions

MOSCOW (MRC) -- Crude oil futures were higher in mid-morning trade in Asia Sept. 28 amid bullish fundamentals and supply restrictions, reported S&P Global.

At 10:20 am Singapore time (0220 GMT), the ICE November Brent futures contract was up 22 cents/b (0.28%) from the previous close at USD79.75/b, while the NYMEX November light sweet crude contract was 25 cents/b (0.33%) higher at USD75.70/b.

"The catalyst driving oil prices strength continues to be the bullish demand outlook and near-term constrained supply, leading to a greater-than-expected drawdowns in crude inventories over the past two weeks," IG Market Strategist, Yeap Jun Rong told S&P Global on Sept 28.

Brent prices have also seen to be surging towards the USD80/b mark. ING research analysts have said in a research note on Sept. 28 that given the strength across the energy complex, it is probably only a matter of time before Brent finally breaches USD80/b.

The last time front-month ICE Brent crossed USD80/b intraday was on Oct. 23, 2018, and Brent last settled above that level on Oct. 17, 2018.

Sharing similar sentiment, several analysts have also noted that the global energy crisis could see demand for crude increase if the northern hemisphere experiences a cold winter, with many countries not equipped to cope.

The record level of natural gas prices and insufficient gas reserves in Europe have offered a significant boost on the demand side, leaving oil as a potentially attractive alternative.

Amid the bullish demand outlook, restrictions on the supply side is also providing additional support to the oil complex.
Global supply outlooks have come under pressure as extended production outages in the US Gulf of Mexico have sent US crude inventories sharply lower in recent weeks.

Inventory withdrawals have also been strong across the US, with oil inventories falling to a three-year low of 414,000 barrels. Fuel shortages are widening, putting upward pressure on oil prices, added ANZ research analysts.

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.
MRC

MOSCOW (MRC) -- Japanese and Indian refiners said Sept. 28 they were cautiously optimistic about the regional oil demand reaching pre-pandemic levels, as the pace of recovery gains momentum due to lower COVID-19 infections, with India taking slightly longer to get there, reported S&P Global.

Higher demand for fossil fuels gasoline and diesel was leading the recovery in Asia, with the consumption in some countries already past the pre-pandemic levels, but weak jet fuel demand was a drag.

Weak jet fuel demand from the aviation sector amid the coronavirus crisis has kept regional refinery runs "significantly" constrained, but there was gaining optimism from vaccine rollouts despite the varied pace in different countries, Kawaguchi said.

India's refineries were currently operating at 90% of their capacity, and processing 4.5 million b/d of crude oil with 5.02 million b/d refining capacity, Debash Patra, executive director Bharat Petroleum Corp. said at the APPEC session, as the country's economy recovers from the pandemic.

The country's pre-pandemic oil consumption was still a few years away, as the aviation fuel recovery was primarily lagging, he said.

"The Indian oil consumption as per my estimate is set to bounce back to pre-covid level in second year from now, that is 2023," Patra said.

India's gasoline demand was 7%-8% above the pre-pandemic levels currently, with diesel demand lower by about 7%-8%, according to Indian Oil Corp. Chairman, Shrikant Madhav Vaidya.

As MRC informed earlier, Indian refiners' crude oil throughput in August dipped to its lowest in 10 months due to ongoing maintenance activities at multiple refineries, according to government data. Refiners processed 4.36 million barrels per day (18.44 million tons) of crude oil last month, the lowest since October 2020 and about 4.8% lower than 4.58 million bpd processed in July. Maintenance activities at some facilities limited production in August, Refinitiv analyst Ehsan Ul Haq said, adding that demand was likely to resume as the festival season approaches, provided cases of COVID-19 remain low.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

MOSCOW (MRC) -- Polyethylene (PE) imports into Russia dropped in January-August 2021 by 11% year on year to 391,900 tonnes. High density polyethylene (HDPE) accounted for the greatest decrease in imports, according to MRC's DataScope report.

Last month's PE imports into the country exceeded 54,700 tonnes versus 53,000 tonnes a month earlier, HDPE and low density polyethylene (LDPE) shipments increased. Overall imports of ethylene copolymers totalled 391,900 tonnes in the first eight months of 2021, compared to 439,200 tonnes a year earlier. HDPE accounted for the main reduction in imports, and linear low density polyethylene (LLDPE) imports also decreased significantly.

The structure of PE imports by grades looked the following way over the stated period.

August HDPE imports rose to 22,700 tonnes from 19,800 tonnes a month earlier, PE shipments from Azerbaijan an Uzbekistan increased. Overall imports of this PE grade totalled 141,300 tonnes in January-August 2021, down by 23% year on year. Film grade and blow moulding HDPE accounted for the main reduction in shipments.

Last month's LDPE imports reached 12,900 tonnes, whereas this figure was at 9,500 tonnes in July. Shipments from Azerbaijan and Belarus increased. Overall LDPE imports to Russia totalled 78,900 tonnes in the first eight months of 2021, up by 7% year on year.

August LLDPE imports were 11,300 tonnes, compared to 13,900 tonnes a month earlier, purchases of film grade PE in the USA and South Korea decreased. Overall LLDPE imports were 100,600 tonnes in January-August 2021, down by 15% year on year.

Last month's imports of other ethylene polymers, including ethylene-vinyl-acetate (EVA), were 7,800 tonnes versus 9,900 tonnes in July. Overall imports of other ethylene polymers reached 70,800 tonnes over the stated period versus 63,100 tonnes a year earlier.

MRC

MOSCOW (MRC) -- Linde has announced plans to increase production capacity at its air separation plant in Mims, Florida, to meet rapidly growing demand for industrial gases, as per the company's press release.

Through its investment, Linde will increase capacity at Mims by almost 50% to supply its contracted customers across all end markets, including aerospace, healthcare, manufacturing, food processing and water treatment.

The project to expand capacity is expected to be completed in 2023. It follows a similar project in 2020, when Linde doubled the production capacity of Mims through the start-up of an additional air separation unit.

"Linde has an excellent track record of safely and reliably supplying its customers in Florida," said Todd Lawson, Vice President Eastern U.S., Linde. "We look forward to further increasing our supply of industrial gases in response to the growing demand for space launch propellant and from the broader economy throughout the region."

As MRC reported earlier, in JUne 2021, SIBUR -Neftekhim and Linde Gas Rus signed agreements on implementation in 2021-2022. a project for the utilization of carbon dioxide (CO2) generated in the technological process of the SIBUR enterprise in Dzerzhinsk. SIBUR -Neftekhim will build an infrastructure for the transportation to the Linde Gas Rus site of crude CO2 obtained as a by-product in the process of ethylene oxide synthesis. In turn, Linde Gas Rus will build a unit to bring the quality of this gas to the level of a commercial product, applicable, among other things, in the food industry, and will sell it to end consumers.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

Linde is a leading global industrial gases and engineering company with 2020 sales of USD27 billion (EUR24 billion). The company serves a variety of end markets including chemicals & refining, food & beverage, electronics, healthcare, manufacturing and primary metals. Linde's industrial gases are used in countless applications, from life-saving oxygen for hospitals to high-purity & specialty gases for electronics manufacturing, hydrogen for clean fuels and much more. Linde also delivers state-of-the-art gas processing solutions to support customer expansion, efficiency improvements and emissions reductions.
MRC

MOSCOW (MRC) -- BASF CEO Dr Martin Brudermuller has received the ICIS CEO of the Year Award at the virtual ICIS Power Players Awards event, said the company.

The ICIS CEO of the Year Award is unique in that the winner is selected by his/her peers – the senior executives of the ICIS Top 40 Power Players listing – a global ranking of the leaders making the greatest positive impact on their companies and the chemicals industry, and published in ICIS Chemical Business.

"The 2021 ICIS Power Players Awards brings together the best and brightest from across the globe to celebrate leadership shaping our industry at such an important time, and recognise individual achievement at the highest level," said Dean Curtis, CEO of ICIS.

"I accept this award with humbleness as it comes from my colleagues in the chemical industry who I highly appreciate. This makes the award very special for me, and it belongs entirely to the BASF team. We create chemistry for a sustainable future, and this truly is a team effort," said BASF CEO Martin Brudermuller at the event.

"I am proud that the BASF team is committed to reduce our carbon emissions quite fast and drastically. We can master these challenges as companies, but also as the chemical industry as a whole. And as leaders, we have the responsibility to make bold decisions and set the right path to a more sustainable future for all of us," he added.

ICIS also announced the winners of two new awards – Saori Dubourg, member of the board of executive directors at BASF, for the ICIS Sustainability Leader Award, and Conrad Keijzer, CEO of Clariant, for the ICIS Emerging Leader Award.

As per MRC, BASF has launched IrgaCycle a new range of additive solutions to address the imminent needs in plastics recycling. The plastics industry is seeking ways to incorporate higher content of recycled polymeric material in all major applications to meet sustainability goals, while facing growing consumer concerns and stricter regulatory requirements to reduce plastic waste. Hereby a major challenge is to mitigate quality deficiencies of polymers arising from thermal and mechanical stress during the recycling process.

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.

BASF's business structure comprises six main segments: chemicals, materials, industrial solutions, surface technologies, nutrition and care, agricultural solutions. At the end of 2020, BASF had sales of EUR59 bn. BASF shares are traded on the Frankfurt Stock Exchange (BAS), on the St. Petersburg Stock Exchange in Russia, and as an American Depositary Receipt (BASFY) in the United States. BASF has been operating in Russia since 1874, is represented in the rating of the 500 largest companies in the country in terms of revenue.

MRC