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Oil prices rose after top oil producer Saudi Arabia dismissed calls for additional OPEC+ supply

October 15/2021

MOSCOW (MRC) -- Oil prices rose on Thursday after top oil producer Saudi Arabia dismissed calls for additional OPEC+ supply and the International Energy Agency said surging natural gas prices could boost demand for oil among power generators, said Hydrocarbonprocessing.

The market trimmed gains after U.S. crude inventories rose more than anticipated as refiners cut production in a generally slower period for those facilities. Brent crude futures gained 62 cents, or 0.75%, to USD83.80 a barrel by 12:57 p.m. EDT (16:57 GMT) after hitting a session high of USD84.50 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 55 cents to USD80.99.

U.S. crude stocks rose by a surprising 6 MM barrels, much higher than the modest 702,000-barrel increase analysts had expected. Production edged higher, reaching 11.4 MM barrels per day (bpd). "The continued rise in domestic U.S. oil production pulls the market back down a bit. It should relieve some of the pressure building in the market," said John Kilduff, partner at Again Capital LLC in New York.

Oil demand is set to jump by half a MMbpd as the power sector and heavy industries switch from more expensive sources of energy, the IEA said, warning that the energy crunch could stoke inflation and slow the world's economic recovery from the pandemic.

In its monthly report, the IEA increased its global oil demand growth forecast in 2022 by 210,000 bpd, and now expects total oil demand in 2022 to reach 99.6 MMbpd, slightly above pre-pandemic levels. Saudi Arabia dismissed calls for additional OPEC+ production increases, saying the group's unwinding of production cuts was protecting the oil market from wild price swings seen in natural gas and coal markets.

At its meeting this month, OPEC+ stuck to its previous agreement to increase output by 400,000 bpd a month. OPEC+, the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, has done a "remarkable" job as so-called regulator of the oil market, Saudi Arabia's energy minister Prince Abdulaziz bin Salman told a forum in Moscow.

U.S. shale producers have been reluctant to invest in raising output after years of weak returns. U.S. production remains well short of late 2019's record at nearly 13 MMbpd. On Wednesday, the EIA said output would rebound to 11.7 MMbpd in 2022. The White House has been in discussions with oil and gas producers about fuel costs, with retail gasoline prices at seven-year highs and winter heating bills expected to rise.

As per MRC, ExxonMobil Synthetics (ExxonMobil) announced it is responding to customer needs and has confirmed plant feasibility to significantly increasing high viscosity metallocene polyalphaolefin (High Viscosity mPAO) synthetic base stock production. The demonstration of higher production capability is a result of a successful plant trial and planned subsequent expansion of the Baytown manufacturing facility in Texas, USA that has been serving customers for 100 years. This resulted in a proven run rate of approximately 20% over design basis and would move the capacity to 60 kilo-tons of High Viscosity mPAO production per year for the plant.

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.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry, Exxon Mobil, Russia, USA.
Category:General News
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