MOSCOW (MRC) -- Crude oil futures were rangebound in mid-morning trade in Asia June 24 as the market awaits fresh drivers, reported S&P Global.
At 09:43 am Singapore time (0143 GMT), ICE Brent August crude futures were down 6 cents/b (0.14%) from the June 23 settle at USD42.57/b, while the NYMEX August light sweet crude contract was 8 cents/b (0.20%) lower at $40.29/b.
"We expect crude oil prices to consolidate from USD37-USD43/b in the short term as the market awaits further developments to determine its next direction," OCBC analysts said in a June 24 note.
"Brent failed to close above the resistance of USD43.40/b yesterday, retreating to USD42.63/b after private estimates suggested US crude oil inventories may climb again this week from the current record high," the analysts said.
Signs global oversupply was easing due to recent OPEC+ efforts have provided a floor to prices, but an increase in COVID-19 cases has threatened demand recovery.
Latest developments in US-China trade tensions have also kept sentiment cautious.
"Brent crude was under pressure earlier in the session amid fears it could hinder the economic recovery. However, comments from US President Donald Trump that the deal remained intact seemed to calm nerves," ANZ analysts said in a June 24 note.
Earlier in the week, Fox News reported that White House Trade and Manufacturing Policy Director Peter Navarro said that Trump had decided to terminate the trade agreement. Trump subsequently tweeted June 23 that "the China Trade Deal is fully intact".
Meanwhile, COVID-19 outbreaks continued to cap recovery optimism amid the emergence of new clusters in the US and Beijing. South Korea has also announced a second wave of coronavirus, according to media reports.
As MRC informed before, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.
Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.
We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC