Crude oil futures continue upward trend amid tightening supply outlook

MOSCOW (MRC) -- Crude oil futures continued their upward climb during mid-morning trade in Asia Oct. 18, hitting fresh multi-year highs as the supply and demand outlook remained supportive for prices and investors weighed the possibility of a return of Iranian oil, reported S&P Global.

At 10:52 am Singapore time (0235 GMT), the ICE December Brent futures contract was up 94 cents/b (1.1%) from the previous close at USD85.87/b, a high not seen since October 2018. The NYMEX November light sweet crude contract rose USD1.33/b (1.61%) at USD83.60/b. It was last higher on October 2014.

"[Last week was] the eighth consecutive week that crude oil has registered weekly gains, signaling strong bullish momentum behind this rally," analysts at OCBC Treasury Research said in a note.

"Easing restrictions around the world are likely to help the recovery in fuel consumption. The jet fuel market was buoyed by news that the US will open its borders to vaccinated foreign travelers next month," analysts at ANZ Research said.

Investors were now eyeing Iranian talks that are set to resume this week, about four months after negotiations were delayed as a new ultra conservative administration took office.

Analysts said the likelihood of a return of Iranian oil to global export markets was unclear.

US Special Envoy for Iran Robert Malley warned of that possibility Oct. 13, saying: "We have to prepare for a world ... where Iran doesn't have constraints on its nuclear program and we have to consider options for dealing with that, even as we hope that we can get back to the deal."

Investors have piled long positions in the ICE Brent and NYMEX light sweet crude contracts in recent weeks, amid the improving sentiment for crude oil. Speculative net longs in ICE Brent crude as of Oct. 5 stood at 332,677 lots, most recent data from ICE showed, a high not seen since March 16.

Speculative net longs in the NYMEX light sweet crude contract meanwhile, stood at 326,605 lots as of Oct 12, a high not seen since July 31, according to data from the US Commodity Futures Trading Commission.

With oil prices hovering at such lofty heights, market watchers have said this will likely prompt a sharp return in production, particularly in the US, threatening the medium-term outlook for oil.

TotalEnergies CEO Patrick Pouyanne said late last week that US shale industry may prove unable to resist ramping up activity to produce more crude oil.

As MRC wrote before, Indian Oil Corp, the country's top refiner, said in May, 2021, that it would resume purchases of Iranian oil if Washington lifts sanctions against Tehran over its disputed nuclear programme.

Besides, Bharat Petroleum Corporation Ltd (BPCL) said then it can buy up to 2 million tons of crude oil from Iran if sanctions are lifted and terms are attractive.

We remind that in April, 2020, BPCL shipped the first consignment of acrylic acid from its Propylene Derivative Petrochemical (PDP) complex at Kochi Refinery. Acrylic Acid is one of the six niche petrochemical products produced in the new PDP Complex at Kochi Refinery.

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) -- Baerlocher, a leading global manufacturer of additives for the plastics industry, is investing in its production plant in Bury, in order to increase the production capacity of its calcium-based polyvinyl chloride (PVC) stabiliser plant by more than 50%, as per the company's press release.

The expantion will be reached by installation of additional new mixing and granulation units in 2022.

The present expansion will support the strong demand in all new and recycled PVC applications and reinforces the company’s commitment to the ‘post Brexit’ UK and Irish markets.

Andy Jones, the group’s Global PVC Additives Head stated: “For the past 25 years, the Bury site has established itself as the premier solid PVC stabiliser production plant in the UK. This expansion begins the next chapter for the company, as we approach our 50th anniversary in the UK during 2023, with an increasingly challenging regulatory framework and complexity in supply chains”.

As MRC reported earlier, in 2017, the Baerlocher USA unit of Baerlocher Group built a third reactor making plastics additives in Cincinnati. The project increase by 50% Baerlcoher’s production of calcium, zinc, sodium and other metal soaps in Cincinnati, where Baerlocher USA is based. It also further positioned the firm to meet steadily accelerating demand from the North American polyolefin and PVC industries.

According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 746,700 tonnes in the nine months of 2021, up by 4% year on year. All producers increased their output.

The Baerlocher Group is a leading manufacturer of additives for the plastics industry. Its portfolio includes a broad range of stabilizers and other additives suitable for all polymer and a range of non-polymer applications. Baerlocher has a strong focus on customer and employee needs and is highly committed to innovation and sustainability. Its pioneering and proactive role is underlined by the support provided to the PVC industry during the transition from lead to calcium-based stabilizers and by its innovative lubricant systems for wood plastic composites.
MRC

MOSCOW (MRC) -- Energy engineering major TechnipFMC has acquired the outstanding shares of Magma Global, a Portsmouth, UK-based company that supplies composite pipes to the oil and gas sector, said the company.

TechnipFMC originally acquired an interest in Magma in 2018, combining its strong history in flexible pipe technology with Magma’s advanced composite capabilities to develop a disruptive composite pipe solution for the traditional and new energy industries.

Magma technology enables the manufacture of Thermoplastic Composite Pipe (TCP) using Polyether Ether Ketone (PEEK) polymer, which is highly resistant to corrosive compounds, such as CO2. When combined with TechnipFMC’s flexible pipe technology, this forms a Hybrid Flexible Pipe (HFP) that will be deployed in the Brazilian pre-salt fields.

Manufactured by a fully automated robotic system, PEEK TCP will also be a critical enabler for both the carbon capture, utilization and storage (CCUS) and hydrogen transportation markets, and particularly in offshore applications.

Jonathan Landes, President, Subsea at TechnipFMC, commented: “Magma and TechnipFMC bring together decades of combined knowledge regarding the development and installation of composite and flexible pipe. The combination of TechnipFMC’s experience delivering complex integrated Engineering, Procurement, Construction and Installation (iEPCI™) projects offshore with Magma’s leading position in composite technologies confirms our commitment to solving the industry’s greatest challenges, while upholding our commitments to sustainability."

Justin Rounce, Executive Vice President and Chief Technology Officer at TechnipFMC, added: “This technology will also be a key enabler for offshore Energy Transition developments, such as transportation of green hydrogen, as pioneered by TechnipFMC’s Deep Purple™ offshore energy system, and transportation of CO2 utilizing an integrated carbon transportation and storage solution."

It originally acquired an interest in Magma in 2018, joining UK performance polymer company Victrex, which became an equity partner in Magma in 2016 and supplies PEEK polymers to Magma under a long-term deal.

In a separate statement, Victrex added that it does not expect any material change in the PEEK supply arrangement with TechnipFMC/Magma.

As per mRC, TechnipFMC announced the launch of the placement of 16 million Technip Energies shares, representing ca. 9% of Technip Energies’ issued and outstanding share capital, through a private placement by way of an accelerated bookbuild offering. Upon completion of the Placement, TechnipFMC would retain a direct stake of ca. 22% of Technip Energies’ issued and outstanding share capital.

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) -- Spanish oil and gas company Repsol says it will invest EUR2.549 billion (USD2.958 billion) in the entire hydrogen value chain by 2030, according to Offshore Energy.

Renewable hydrogen is one of Repsol’s strategic pillars to achieve zero emissions by 2050. Thus, the company presented its hydrogen strategy for up to 2030.

Its goal is to become the market leader in the Iberian Peninsula. It also wants to position itself as a relevant producer in Europe. By 2030, the company additionally plans to have an equivalent installed capacity of 1.9 gigawatts. That is why it is planning all this investment.

Repsol said it will use different technologies to reach its renewable hydrogen production targets. These include electrolysis, biogas production, and photoelectrocatalysis. The last is a proprietary technology developing since 2018 with Enagas as a partner.

The plans will kick off with a demonstration plant in 2025. If successful, this will give Spain a leading technological position in the new H2 value chain, Repsol thinks.

As MRC reported earlier, Repsol and Portugal's EDP have just signed an agreement to jointly develop renewable hydrogen projects in the two countries. The companies plan to develop projects in Asturias and the Basque Country in Spain, and Sines in Portugal.

We remind that the “Cracker of the Future” consortium has announced two new member companies: Repsol and Versalis (Eni) have recently joined the consortium.

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.

Repsol is headquartered in Madrid, Spain. In the 2020 Forbes Global 2000, Repsol was ranked as the 645th-largest public company in the world. It has more than 24,000 employees worldwide. Its products are distributed in nearly 100 countries to around 24 million customers. Repsol Industrial Complex in Sines is the largest chemical site in Portugal.
MRC

MOSCOW (MRC) -- China’s Rongsheng Petrochemical has bought its first condensate cargoes for its mega refinery to be delivered in December, reported Reuters with reference to trade sources.

The trading arm of Chinese private refiner Zhejiang Petrochemical purchased a North West Shelf (NWS) condensate cargo from BPand a Bayu Undan condensate cargo from Glencore , they said.

It is unusual for the refiner to purchase condensate as it typically buys medium to heavy sour crude for its mega refinery, traders said.

The refiner might be blending the condensate cargoes with the 2 million barrels of Iraqi Basra Light crude it purchased in a tender from Chinese trader Unipec earlier this week, one of the sources said. Condensate yields more naphtha, a feedstock for the refiner’s petrochemical production.

Zhejiang Petrochemical Co Ltd (ZPC) operates China’s largest refinery capable of processing 800,000 barrels per day of crude in Zhoushan, Zhejiang province.

As MRC informed before, earlier this year, ZPC started up its No. 2 cracker in Zhoushan, China, which is part of the company's phase 2 petrochemical project in the cournty. Thus, the cracker with an annual capacity of 1.4 million tons/year of ethylene and 700,000 tons/year of propylene began trial runs in early April 2021. The commercial production at this facility was received two weeks later.

We remind that ZPC started operations at its No. 1 cracker in the first half of November 2019, whereas the commercial production at this cracker was received in late December 2019.

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