Crude oil futures continue falling on stronger dollar and recent uptick in COVID-19 cases in Europe and China

Crude oil futures continue falling on stronger dollar and recent uptick in COVID-19 cases in Europe and China

MOSCOW (MRC) -- Crude oil futures extended declines in midmorning trade in Asia Nov. 15, as investors continued to fret over a stronger dollar amid signs of rising inflation and a recent uptick in COVID-19 cases in Europe and China, reported S&P Global.

At 10:12 am Singapore time (0212 GMT), the ICE January Brent futures contract was down 49 cents/b (0.60%) from the previous close at USD81.68/b, while the NYMEX December light sweet crude contract fell 39 cents/b (0.48%) to USD80.40/b.

Bearish pressures continued to dominate sentiment in an event-thinned week of Nov. 14, with investor confidence shaken in recent days by signs of rising inflation in the US. The Biden Administration has hinted at action to tackle surging energy prices in the form of Strategic Petroleum Reserve releases.

"The White House has been debating how to tackle higher inflation, with some officials calling for the strategic reserve to be tapped, or halting US exports," said ANZ Research analysts Brian Martin & Daniel Hynes in a note.

The latest inflation prints could also bring forward the US Federal Reserve's plans to tighten its easy monetary policy further with earlier rate hikes. A majority of traders were now pricing in a rate hike as early as June 2022, compared to earlier expectations of a hike in November 2022, according to the CME FedWatch Tool.

The US dollar has strengthened as a result, with the US dollar index notched near highs not seen since July 2020. As of 0212 GMT, the index was down 0.15% at 94.99.

Meanwhile, the recovery in global mobility has stalled amid an uptick in COVID-19 cases worldwide. China continues to battle its latest outbreak of cases, while several European countries including Germany, Austria and the Netherlands have registered record caseloads in recent days.

Global mobility in the week to Nov. 8 averaged 9.8% below pre-COVID levels in most of the world's top oil users excluding China, according to the latest Google data, up from 8% a week earlier.

IG market strategist Yeap Jun Rong said the outlook for oil prices will remain clouded in the near-term, while not ruling out further declines in the days ahead.

As MRC wrote previously, the average utilisation rate at China's four state-owned refiners fell to a five-month low of 80.6% in October from 81.5% in September while independent refiners also maintained run rates at low levels due to feedstock shortage. These would likely lead the country's crude throughputs to extend the downward trend in October from the 17-month low of 13.7 million b/d, or 56.07 million mt, in September, according to data from the National Bureau of Statistics.

The four state oil companies -- Sinopec, PetroChina, CNOOC and Sinochem - plan to process a total 7.67 million b/d of crudes in October, against their nameplate capacity of 9.52 million b/d, Platts data showed. This compared with a planned throughput of 7.7 million b/d in September. In November, the state-run refiners plan to lift throughput from the low base in October to boost gasoil and gasoline supplies for meeting domestic demand, refining sources 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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC

Plastic Energy and Axens signed agreement for recycling of plastic waste

Plastic Energy and Axens signed agreement for recycling of plastic waste

MOSCOW (MRC) -- Plastic Energy and Axens have announced the signing of a strategic collaboration agreement in the field of advanced recycling of plastics, to increase recycling and decrease plastic waste, said Hydrocarbonprocessing.

Plastic Energy and Axens will market and license Plastic Energy’s patented, industrially proven advanced recycling technology, which uses a thermal anaerobic conversion (TAC) pyrolysis process to recycle, end-of-life plastics that would otherwise be destined for landfill, incineration or end up in the environment. The Plastic waste from Plastic Energy’s process is turned into raw materials that can be used to create virgin-quality polymers.

The partners will provide customers with technical and business case studies, basic engineering, technical services, proprietary equipment, complete modular units and support to operations, leveraging Plastic Energy and Axens’ complementary operational, licensing and engineering skills. The partners will also be in position to propose and license a complete technological solution for the pyrolysis pathway, combining Plastic Energy’s recycling technology and the Axens Rewind® Mix process for the purification of plastics pyrolysis oil.

"We are extremely glad to announce our strategic partnership with Plastic Energy, a major milestone in Axens’ ambition to develop and propose an extended portfolio of advanced technologies for the plastic circular economy. Achieving a true circular economy of recycled polymers, including for food contact and health care grade, is a largely shared objective. We believe that Plastic Energy and Axens, together and leveraging our complementary operational and technological skills, can now offer a combination of proven technologies to make it possible” said Jean Sentenac, Chairman and CEO of Axens.

"I am delighted to announce this collaboration agreement with solution-provider Axens to expand our patented and proven advanced recycling technology globally.” said Carlos Monreal, CEO of Plastic Energy. “The operational experience that Plastic Energy has gained over the last 5 years from our current recycling plants in Spain sets us apart in the market and will be invaluable to our new licensing customers. Through this partnership with Axens, we will be able to increase the amount of plastic waste that can be recycled and work towards a more circular economy for plastics.'

As per MRC, Sumitomo Chemical has successfully conducted the first waste-based polyolefin production at its laboratory in Japan earlier this year, by use of the ethylene produced by Axens ethanol-to-ethylene technology Atol. This process value chain is complemented with the upfront “Waste to Ethanol” technology by Sekisui Chemical.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC

TotalEnergies and Daimler Truck to jointly develop hydrogen ecosystem for transportation in Europe

TotalEnergies and Daimler Truck to jointly develop hydrogen ecosystem for transportation in Europe

MOSCOW (MRC) -- TotalEnergies and Daimler Truck AG have signed an agreement on their joint commitment to the decarbonization of the road freight in the European Union, as per Total's press release.

The partners will collaborate in the development of ecosystems for heavy-duty trucks running on hydrogen, with the intent to demonstrate the attractiveness and effectiveness of trucking powered by clean hydrogen and the ambition to play a lead role in kickstarting the rollout of hydrogen infrastructure for transportation.

The collaboration includes hydrogen sourcing and logistics, dispensing of hydrogen in service stations, development of hydrogen-based trucks, establishment of a customer base as well as other areas.

In particular, TotalEnergies has the ambition by 2030 to operate directly or indirectly up to 150 hydrogen refueling stations in Germany, the Netherlands, Belgium, Luxemburg and France.

As part of the collaboration, Daimler Truck is also to supply hydrogen-powered fuel-cell trucks to its customers in the Netherlands, Belgium, Luxemburg and France by 2025. The truck manufacturer will support its customers to ensure easy operability and highly competitive uptime.

Alexis Vovk, President Marketing & Services at TotalEnergies and member of the Executive Committee said: “Hydrogen will have its role in TotalEnergies' journey to decarbonize mobility, especially in European long-haul transportation. Our company is actively exploring all aspects of the value chain of Hydrogen for mobility, from production to supply and distribution, and is building important partnerships to this effect. We want to build a multi-energies company with the ambition to get to Net Zero by 2050, together with society. Therefore, the creation of a European network of H2 truck stations for mobility is one of the key challenges we intend to tackle. We are proud to partner with a motivated player like Daimler Truck to develop CO2-neutral truck mobility through a harmonized approach.”

In order to develop these projects and to establish hydrogen-based transportation as a viable option, both companies want to jointly investigate the means of reducing the Total Cost of Ownership (TCO) of hydrogen truck operations, in line with their common approach to work together with authorities on the regulatory framework in the European Union.

TotalEnergies is a global multi-energy company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables and electricity. Its 105,000 employees are committed to energy that is ever more affordable, cleaner, more reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.

As MRC informed before, with its name change from Total to TotalEnergies amid its transition from fossil fuels, the major oil company is investing more in renewables and energy storage while decreasing emissions from its natural gas business.

We remind that TotalEnergies has recently inaugurated the extension of Synova in Normandy, the French leader in recycled polypropylene production. TotalEnergies is therefore doubling its mechanical recycling production capacity for recycled polymers, to meet growing demand for sustainable polymers from customers, such as Automotive Manufacturer (Auto OEM) and the construction industry.

According to MRC's ScanPlast report, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

TotalEnergies is a broad energy company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables, and electricity. The company rebranded itself from Total to TotalEnergies during Q2 2021. The French firm has announced allocating part of surplus revenues to share buybacks. Its 105,000 employees are committed to energy that is ever more affordable, clean, reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
MRC

Shell, Baker Hughes sign collaboration agreement to accelerate energy transition

Shell, Baker Hughes sign collaboration agreement to accelerate energy transition

MOSCOW (MRC) -- Shell Global Solutions BV and energy technology company Baker Hughes have signed a broad strategic collaboration agreement to accelerate the global energy transition by helping each other achieve their respective commitments for net-zero carbon emissions and advancing solutions to decarbonize energy and industrial sectors, as per Shell's press release.

The memorandum of understanding (MoU) intends to build on the existing relationship between Shell and Baker Hughes in key areas:

- Shell will initially provide selected Baker Hughes US sites with power and renewable energy credits and the companies will negotiate renewable power for Baker Hughes’ sites in Europe and Singapore.
- Shell and Baker Hughes also agreed to broader collaboration to identify other opportunities to accelerate each other’s transition to net-zero carbon emissions by 2050, such as Baker Hughes providing low-carbon technology solutions for Shell’s LNG fleet.
- The two companies will further explore potential opportunities to co-invest and participate in new models to decarbonize energy and industrial sectors.

Harry Brekelmans, Projects & Technology director at Shell, said: “Shell and Baker Hughes both have clear ambitions to decarbonize and have already made progress through technical innovations. I’m proud of the work that has been done so far, and with this new agreement, we are taking it one step further. It will enable us - and our partners - to push the boundaries of what can be achieved and move even closer toward our net-zero targets.”

As a first step in the collaboration, the parties seek to finalize Shell’s supply of certain Baker Hughes US facilities with power and renewable energy credits for a two-year period.

In 2021, Baker Hughes’ global renewable electricity consumption was 22%, and with this agreement, it is expected to grow by 2% to 24% annually.

Shell and Baker Hughes will also negotiate supply of up to 100 GWh of renewable power for Baker Hughes facilities in Europe and explore the development of an on-site solar solution for Baker Hughes’ chemical blending plant in Singapore.

Shell and Baker Hughes will further collaborate to explore additional opportunities to help Baker Hughes accelerate its transition to net-zero carbon equivalent emissions, including Shell providing low-carbon transportation and fuel solutions for Baker Hughes.

In turn, Shell will evaluate opportunities for Baker Hughes to provide low-carbon solutions for Shell’s LNG fleet through technology upgrades and compressor re-bundles. Baker Hughes will also help Shell develop digital solutions to accelerate decarbonization across Shell’s global assets and operations.

In addition to advancing each other’s own emissions reductions, Shell and Baker Hughes will collaborate to explore opportunities to offer solutions for hard to abate industries globally.

As MRC informed earlier, Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

EIA predicts crude oil prices to go down in November and through 2022

EIA predicts crude oil prices to go down in November and through 2022

MOSCOW (MRC) -- The EIA forecasts that crude oil prices will begin declining in November 2021 and will decline through 2022, according to Hydrocarbonprocessing.

We expect that the price of WTI will fall from an average of USD76/b in January 2022 to USD62/b in December and that the price of Brent will fall from USD79/b in January 2022 to USD66/b in December, said EIA.

Since the third quarter in 2020, global demand for crude oil and petroleum products has increased faster than production, which has led to inventory draws and increasing crude oil prices.

In February 2020, before the World Health Organization declared COVID-19 a pandemic, the spot price for Brent crude oil averaged USD56 per barrel and USD51/b for West Texas Intermediate (WTI). The spot prices for Brent fell to USD18/b and WTI to USD17/b in April 2020 because of the significant decline in demand caused by the pandemic.

Prices have since increased and are now above pre-pandemic levels because of returning demand and slow global oil production growth. In October, the price of Brent crude oil averaged USD84/b, and the price of WTI averaged USD81/b, the highest nominal prices since October 2014. In the EIA's November Short-Term Energy Outlook (STEO), they forecast that global liquid fuels inventories will begin building in 2022, driven by rising production from OPEC+ and the United States, which will contribute to falling crude oil prices.

The futures markets are similarly showing high prices in the near term compared with longer-dated contracts. Crude oil stock levels, among other factors, affect the relationship between near-term and longer-term futures prices.

Differences in prices between crude oil contracts for delivery in the near term compared with contracts for delivery at later dates indicate market expectations that stock draws will moderate. Low crude oil inventories, both globally and in the United States, have put upward price pressure on near-dated contracts, whereas longer-dated contract prices likely reflect expectations of a more balanced market. Because of the upward price pressure on the near-term contracts, near-dated contracts have higher prices than longer-dated contracts, a situation referred to as backwardation. When near dated contracts have lower prices than longer-dated contracts, it is known as contango.

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, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC