Crude oil futures drop in Asia after large US inventory build

MOSCOW (MRC) -- Crude oil futures drifted lower during mid-morning trade in Asia Nov. 3 amid reports of a large build in US oil inventories last week, while investors remained cautious ahead of the Nov. 4 OPEC+ meeting, reported S&P Global.

At 10:20 am Singapore time (0220 GMT), the ICE January Brent futures contract was down USD1.33/b (1.56%) from the previous close at USD83.39/b, while the NYMEX December light sweet crude contract fell USD1.54/b (1.84%) at USD82.37/b.

"The rally in oil prices took a pause overnight," IG market strategist Yeap Jun Rong said in a note.

"It seems that as the OPEC+ meeting nears, more pressure from countries, such as the US and Japan, to boost production are putting some risk sentiments for oil prices on hold, alongside the much higher-than-expected rise in API crude inventories overnight," Yeap added.

The American Petroleum Institute data out late Nov. 2 showed a 3.6 million barrel build in US crude oil stocks in the week ended Oct. 29.

If confirmed by data from the US Energy Information Administration out later Nov. 3, crude oil inventories would have risen for five of the last six weeks, indicating that demand is not recovering as quickly as expected, industry sources said.

Gasoline inventories, meanwhile, fell 552,000 barrels, while distillate stocks climbed 573,000 barrels, the API data showed.

Nonetheless, calls have been growing for the OPEC+ group to raise production beyond the scheduled 400,000 b/d per month when they convene on Nov. 4. Key oil-consuming countries including the US, Japan and India have pressured the group to temper oil prices that have surged amid a global gas crisis, outages and a lack of oil investments due to climate change pledges.

Recent public comments from OPEC members, however, showed they are unlikely to budge. Kuwait's oil minister said Nov. 1 he supports the OPEC+ group's planned 400,000 b/d monthly crude output hike, while Saudi Arabia's energy minister Prince Abdulaziz bin Salman said Oct. 20 he saw no evidence of a crude shortage.

Most analysts expect the group to stand pat on their scheduled increases when the meeting concludes.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

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) -- Saudi Aramco's downstream business consumed 43.5% of the company's crude in the first nine months of 2021, while its bottom line for the third quarter to September was in the black amid an improvement in market conditions, reported S&P Global.

During January-September 2020, Aramco's downstream oil consumption stood at 39.5%, the company said in an earnings report released Nov. 1.

Aramco's downstream business swung to a profit in the third quarter compared to a year earlier as the world's biggest oil company benefited from better refining and petrochemical margins.

Aramco's earnings before interest, income taxes and zakat reached Riyal 14.8 billion (USD3.957 billion), compared with a Riyal 2.98 billion loss a year ago.

"These strong earnings reflect continued strength in refining and chemicals margins and the resulting inventory movement gains due to improving market conditions," Aramco said.

Aramco pumped on average 9.5 million b/d in Q3 and its profit more than doubled to USD30.4 billion on higher crude prices and production.

Total hydrocarbon production in Q3 was 12.9 million boe/d, Aramco said in its earnings report. It did not provide the corresponding year-ago data, but total hydrocarbon production had increased from the first nine months of 2020, when it stood at 12.4 million boe/d, of which 9.2 million b/d was crude oil.

As MRC informed before, in June 2020, Aramco finalized its USD69 billion acquisition of a 70% stake in Saudi Basic Industries Corp., the Middle East's biggest petrochemical maker. SABIC reported more than a fivefold year-on-year increase in its Q3 net profit to USD1.49 billion thanks to higher average sales prices.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) -- Venezuela's oil exports last month surpassed 700,000 barrels per day (bpd) as supplies of imported diluents boosted production and shipments, reported Reuters with reference to documents from state-run firm PDVSA and Refinitiv Eikon tracking data.

The OPEC-member country's largest oil producing region has regained its output and blending capacity in recent weeks after Iran, one of the nation's most important allies, began regularly supplying condensate for diluting the Orinoco Belt's extra heavy oil. Iranian supplies are lessening the impact of US sanctions on the nation's output.

In October, PDVSA and its joint ventures shipped 30 cargos of crude and refined products, mostly to Asia, including a 2-MM-bbl cargo of Merey heavy crude to pay back Iran for the condensate received.

The second cargo of Iranian condensate from the swap agreement is expected to finish discharging from the tanker Dorena at PDVSA's Jose port this month, according to the documents.

Venezuela's exports averaged 711,193 bpd in October, the third highest average so far this yr and a 76% increase from September, when an acute lack of diluents forced PDVSA to cut back output and blending. Larger shipments of residual fuel oil, methanol and petroleum coke also contributed to the exports increase last month, according to the documents and data.

Venezuela's oil exports, which along with Iran's are under US sanctions designed to limit sales, have stabilized this year at around 633,000 bpd, a slight increase from the 626,000 bpd of 2020 but still a large decline from previous years when PDVSA had not been blacklisted by the US Treasury Department. Venezuela also shipped 66,000 bpd of crude and refined products to Cuba, the data showed.

As MRC informed before, in June 2021, Venezuela's political opposition has replaced members of the boards overseeing Citgo Petroleum Corp as factions in the movement led by Juan Guaido try to gain greater influence over Houston-based oil refiner. Citgo split from Venezuelan state-run oil company PDVSA in 2019 after the US imposed sanctions intended to oust Venezuela's President Nicolas Maduro. Then congress chief Juan Guaido appointed new boards and won US court recognition of their authority over the refining subsidiary.

We remind that in September 2020, Citgo Petroleum Corp said it did not plan to idle its 418,000 barrel-per-day (bpd) Lake Charles, Louisiana, refinery damaged by Hurricane Laura. Rumors have circulated since Laura’s passage over the Lake Charles area on Aug. 27 that Citgo was considering shutting the refinery for an indefinite period because of the extent of the damage and continuing low demand for motor fuels in the COVID-19 pandemic.

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 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
MRC

MOSCOW (MRC) -- Kazakhstan’s state-owned KazMunayGas (KMG) group and industrial gases and engineering company Linde have signed a memorandum of understanding on developing clean energy projects that may include production of green and blue hydrogen and ammonia, said Gasworld.

Having inked a Memorandum of Understanding (MoU) today (1st Nov) to explore both green and blue hydrogen and ammonia production, the duo hopes to accelerate clean energy projects in the region.

To do this, a feasibility study will be carried out to evaluate both using natural gas as a feedstock, to create blue hydrogen and blue ammonia, and water electrolysis technologies to create green hydrogen and green ammonia.

Upon completion of the feasibility study, the partnership will then work to develop a green hydrogen and green ammonia production plant in Kazakhstan.

On the effort, Alik Aidarbayev, Chairman of KMG’s Management Board, said, KazMunayGas has a consistent and balanced approach to the decarbonisation projects as part of its adopted Low-Carbon Development Programme. Cooperation with the world’s leading companies is a priority in studying promising projects in this area."

Thomas Hilker, Linde Gas Rus Vice-President for Investment in Russia and CIS, added, “I am glad our company is able to contribute to the process of decarbonisation in Kazakhstan.

“In particular, jointly with our partner, KazMunayGas, which has taken the lead among other companies in implementing greenhouse gas reduction activities. I am looking forward to being able to bring our large experience in this area to real projects."

As per MRC, the National Oil and Gas Company of Kazakhstan KazMunayGas (KMG) and the country's largest oil producer, Tengizchevroil LLP, have agreed to supply propane to the polypropylene plant in Karabatan.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
MRC

MOSCOW (MRC) -- Honeywell has announced the commercialization of a revolutionary process that expands the types of plastics that can be recycled and can produce feedstock used to make recycled plastics with a lower carbon footprint, according to Hydrocarbonprocessing.

The new technology can reduce the need for fossil fuels in the creation of virgin plastics while enabling hundreds of cycles of recycling, with the goal of enabling a circular economy for plastics.

Honeywell's UpCycle Process Technology utilizes industry-leading molecular conversion, pyrolysis, and contaminants management technology to convert waste plastic back to Honeywell Recycled Polymer Feedstock, which is then used to create new plastics.

The UpCycle Process technology expands the types of plastics that can be recycled to include waste plastic that would otherwise go unrecycled, including colored, flexible, multilayered packaging and polystyrene (PS). When used in conjunction with other chemical and mechanical recycling processes - along with improvements to collection and sorting Honeywell's UpCycle Process Technology has the potential to increase the amount of global plastic waste that can be recycled to 90%.

Recycled plastics produced via UpCycle Process Technology can result in a 57% reduction of CO2-equivalent (CO2e) emissions compared with the production of the same amount of virgin plastic from fossil feeds.2 The process also reduces CO2e emissions by 77% compared with conventional modes of handling waste plastic, such as incineration and landfilling2.

"Plastics play an important role in our society, including expanding the shelf life of food and making vehicles lighter, which reduces their emissions. Unfortunately, only a fraction of plastics today can be successfully recycled," said Vimal Kapur, president and chief executive officer of Honeywell Performance Materials and Technologies. "Honeywell's UpCycle process helps fix this problem. By broadening the types of plastic that can be recycled, UpCycle will revolutionize the plastics economy and play a critical role in improving the sustainability of many of the products we use on a daily basis."

Sacyr, a Spain-based global engineering and services company with operations in more than 20 countries worldwide, will be the first to deploy Honeywell's proprietary UpCycle Process Technology. Honeywell and Sacyr will form a joint venture where the two companies will co-own and operate a facility in Andalucia, in Southern Spain, with a capacity to transform 30,000 metric t per yr of mixed waste plastics into Honeywell Recycled Polymer Feedstock. Production is expected to begin in 2023.

Honeywell's UpCycle Process Technology was created within Honeywell's Sustainable Technology Solutions (STS) group, which is part of Honeywell UOP. This latest technology builds upon Honeywell's focus to deliver high impact, environmentally sustainable solutions for customers and society.

Honeywell recently committed to achieve carbon neutrality in its operations and facilities by 2035.

As MRC reported earlier, in March 2021, Honeywell announced that Hengli Petrochemical Co. Ltd. successfully used Callidus burner technology from Honeywell UOP to minimize nitrogen oxide (NOx) and carbon monoxide (CO) emissions in China, and reduce the impact of these emissions while ensuring safe and stable operations.

Besides, in November, 2020, Honeywell announced Zhenhua Petrochemical Co. Ltd will use Honeywell UOP’s C3 Oleflex technology for propane dehydrogenation to process 1 million metric tons per year of polymer-grade propylene for a proposed plant in Dongying City, Shandong Province, China.

Propylene is the main feedstock for production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.
MRC