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Phillips 66 lowers 2021 spending budget after pandemic hit

December 16/2020

MOSCOW (MRC) -- US oil refiner Phillips 66 on Monday set its 2021 capital budget at USD1.7 billion, around 43% lower than forecast for the previous year, as the energy industry struggles to recover from the blow of the COVID-19 pandemic, reported Reuters.

The coronavirus crisis and resulting lockdowns upended global travel and fuel demand, creating a supply glut that pushed US crude oil prices briefly into negative territory in April.

West Texas Intermediate crude futures have recovered much of those losses on the back of COVID-19 vaccine progress, although they have shed about 23% of their value so far this year.

Phillips 66 Chief Executive Officer Greg Garland on Monday warned that market conditions remain challenging, even as smaller rival HollyFrontier Corp last month outlined plans to double its spending next year, counting on an expected recovery in fuel demand.

Garland said the company's focus will be on cutting expenditures and for 2021, it will prioritize completion of projects in progress and renewable fuels, which have seen a demand surge this year.

Phillips 66 said its 2021 budget includes capital expenditures of USD776 million on the refining segment and USD610 million on midstream.

As MRC wrote before, in October 2020, US refiner Phillips 66 said it plans to reconfigure its refinery in Rodeo, California to produce renewable fuels from used cooking oil, fats, greases and soybean oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (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.


mrcplast.com
Author:Margaret Volkova
Tags:PP, PE, LLDPE, crude and gaz condensate, PP random copolymer, propylene, HDPE, ethylene, petrochemistry, Chevron Phillips, Phillips 66, Russia, USA.
Category:General News
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