MOSCOW (MRC) -- Oil prices fell on Tuesday, adding to losses from the previous session that came as California tightened its pandemic lockdown through Christmas and coronavirus cases continued to surge in the United States and Europe, reported Reuters.
US West Texas Intermediate (WTI) crude futures fell 18 cents or 0.4%, to USD45.58 a barrel at 0153 GMT, while Brent crude futures fell 24 cents, or 0.5%, to USD48.55 a barrel. Both benchmark contracts lost around 1% on Monday.
Globally, a sharp rise in coronavirus cases has led to a string of renewed lockdowns, including strict measures in the US state of California as well as Germany and South Korea.
"The pandemic situation is continuing to be very disruptive in quite a few places in the US and parts of Europe. That's impacting sentiment on demand near term," said Lachlan Shaw, National Australia Bank's head of commodity research.
California on Monday required most of the state to close shop and stay at home under a new order which will last at least three weeks.
Government sources in France said the country may have to delay unwinding some lockdown restrictions next week after signs the downward trend in new cases had flattened out after shops were allowed to reopen late last month.
Following last week's rally in oil prices on the back of vaccine rollout plans and an agreement by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, to hold back supply increases, analysts said they were closely watching US lawmakers' efforts to approve a new economic stimulus package.
The stimulus will be needed to drive jobs growth, and, in turn, energy demand.
"For the moment, the market is happy to look past these issues as the vaccine rollout begins; however the economic headwinds are building in the short term," ANZ Research said in a note.
Data due from the American Petroleum Institute later on Tuesday and from the US government on Wednesday is expected to show that US crude stocks fell last week, while refined product stockpiles rose, according to estimates from five analysts polled by Reuters.
As MRC informed previously, global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.
Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40% in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.
And 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 PE and PP.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,760,950 tonnes in the first ten months of 2020, up by 3% year on year. Only high density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased. At the same time, PP shipments to the Russian market reached 978,870 tonnes in January-October 2020 (calculated using the formula: production minus exports plus imports minus producers' inventories as of 1 January, 2020). Supply of exclusively of PP random copolymer increased.
MRC