US crude, fuel inventories rise as production rebounded from recent storms

MOSCOW (MRC) -- US crude oil, gasoline and distillate inventories rose last week as the production rebounded from recent storms, reported Reuters with reference to the US Energy Information Administration's statement.

Crude inventories rose by 4.6 MMb in the week to Sept. 24 to 418.5 MMb, EIA data showed, compared with analysts' expectations in a Reuters poll for a 1.7 MMb drop.

The rebound came as US crude output jumped by 500,000 bpd to 11.1 MMbpd, a level consistent with activity before Hurricane Ida slammed into the US Gulf Coast about a month ago. Analysts consider weekly production data less reliable than monthly figures, which are released on a lagging basis.

Refinery crude runs rose by 68,000 bpd in the last week. Refinery utilization rates rose by 0.6 percentage point to 88.1% of total capacity on the week.

US gasoline stocks posted a modest gain of 193,000 barrels to 221.8 MMb, compared with expectations for a 1.4 MMb rise. Gasoline product supplied was 9.2 million bpd over the last four weeks, or about 1% below pre-pandemic levels seen in 2019.

Distillate stockpiles, which include diesel and heating oil, rose by 385,000 barrels in the week to 129.7 million barrels, versus expectations for a 1.6 MMb drop.

Crude stocks at the Cushing, Oklahoma, delivery hub for US futures rose by 131,000 barrels in the last week, the EIA said.

US oil prices briefly dipped on the news before rebounding to trade around even on the day, down 3 cents to US75.26 a barrel as of 10:39 a.m. ET (1439 GMT). Brent lost 14 cents to USD78.95 a barrel, also recovering some losses.

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) -- Karpatneftekhim (Kalush, Ivano-Frankivsk region), Ukraine's largest petrochemical plant, has resumed its high density polyethylene (HDPE) production, according to ICIS-MRC Price report.

The plant's clients said the Ukrainian producer resumed its PE output on 28 September after an unscheduled shutdown due to technical issues. The outage was not long and lasted for about 5 days. The plant's annual production capacity is 120,000 tonnes.

Karpatneftekhim is one of the largest enterprises of Ukraine's petrochemical complex. Currently, the plant can produce annually 300,000 tonnes of PVC, 200,000 tonnes of caustic soda, about 180,000 tonnes of chlorine, as well as 250,000 tonnes of ethylene and 100,000 tonnes of polyethylene.
MRC

1. TotalEnergies expects rise in use of renewable energy in future

MOSCOW (MRC) -- TotalEnergies said that it expected a big rise in renewable-based electricity, solar and wind forms of energy, partly due to a general increase in electrification in the industrial and business world, reported Reuters.
TotalEnergies added it expected that oil in general would plateau before 2030, while natural gas would continue to play a role as a transition fuel. Producers and traders had said at an industry conference on Monday that global oil demand was expected to reach pre-pandemic levels by early next year as the economy recovers, although spare refining capacity could weigh on the outlook.

MRC

MOSCOW (MRC) -- Crude oil futures were lower mid-morning Sept. 30 as investors adopt a wait-and-see approach ahead of OPEC+ meeting, while a stronger dollar and the increase of US crude stocks added further headwinds to energy prices, reported S&P Global.

At 10:30 am Singapore time (0230 GMT), the ICE November Brent futures contract was down 24 cents/b (0.31%) from the previous close at USD78.40/b, while the NYMEX November light sweet crude contract was 5 cents/b (0.05%) lower at USD74.78/b.

"The rally in oil prices continue to take a pause, with investors largely digesting the US dollar strength and unexpected increase in crude inventories," IG Market Strategist Yeap Jun Rong told S&P Global on Sept 30, adding that the recent oil price rally may also carry a more cautious tone ahead, as investors adopt a wait-and-see approach going into the OPEC+ meeting next week.

According to the US Energy Information Administration data showed late Sept. 29, total US commercial crude oil stocks climbed 4.6 million barrels to 418.54 million barrels in the week to Sept. 24. U.S. crude oil inventories are about 7% below the five year average for this time of year. Total motor gasoline inventories increased by 200,000 barrels on the week, while distillate fuel inventories increased by 400,000 barrels. The build was largely in line with recent expectations, with recent American Petroleum Institute data showing stockpiles were up 4.1 million barrels in the week.

"US oil output reached 11.1 million b/d after slumping to 10 million b/d early this month due to Hurricane Ida, while refineries are restoring production," said ANZ research analysts in a note on Sept. 30, adding that recovering US oil production has helped to build inventories.

Nevertheless, a tight market for oil is still remain to be seen amid the supply constraint with the growing demand. Meanwhile, a stronger US dollar has added further pressure to crude prices. The US dollar index was seen at 94.29 in midmorning trading and on pace to close at a one-year high.

As MRC informed earlier 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 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) -- China Petroleum and Chemical Corp, also known as Sinopec - the world's largest refiner by volume, has recently started construction of the largest hydrogen supply center for hydrogen fuel cells in Guangdong, according to ChinaDaily with reference to its operator.

The project will help the hydrogen sector in Guangdong rapidly develop and lift the region's hydrogen production and supply capacity.

With total investment of 62.44 million yuan (USD9.66 million), the project will adopt Sinopec's independent intellectual property rights technology and is expected to be put into operation by the first quarter next year, it said.

The company plans to invest 30 billion yuan during the 14th Five-Year Plan (2021-2025) period in hydrogen-related business, including hydrogen refueling stations and hydrogen storage facilities construction, all of which is believed to achieve carbon dioxide reduction of more than 10 million tons.

The company also plans to build 1,000 hydrogen refueling stations, 5,000 charging and battery swap stations and 7,000 distributed photovoltaic power generation sites during the 14th Five-Year Plan period. It has already built 21 hydrogen refueling stations in 14 provinces and cities, including Guangdong, Shanghai and Hainan.

As MRC reported before, in August, 2021, Sinopec, the world's petrochemical major, launched the first phase of the Gulei refining complex in Zhangzhou city in China’s southeastern Fujian province. The refining complex, a 50:50 joint venture between Sinopec’s Fujian Petrochemical Company Ltd and Taiwan Xuteng Investment Company Ltd, invested 27.8 billion yuan (USD4.28 billion) in the first phase. That will result in an 800,000 tonnes per annum ethylene plant, a 600,000 tonnes per annum styrene unit and seven other downstream petrochemical units, Sinopec said.

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.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
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