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U.S. crude oil production decreased to lowest level since 2017 in February

May 06/2021

MOSCOW (MRC) -- Crude oil output in the U.S. fell by more than 1 MMbpd in February, falling to the lowest levels since October 2017, according to a monthly government report, said Hydrocarbonprocessing.

U.S. oil production dropped 1.197 MMbpd in February to 9.862 MMbpd, according to a monthly report from the U.S. Energy Information Administration. Production fell in top producing states North Dakota and Texas, as well as in the offshore Gulf of Mexico, the report said.

February's data is the first time oil production has dropped below 10 MMbpd since January 2018, according to the agency. The output drop came as a freeze in Texas shut in some production, but declines were also seen in other major oil-producing states.

Meanwhile, monthly gross natural gas production in the U.S. Lower 48 states fell by 7.8 billion cubic feet per day (Bcfd), the biggest monthly decline on record, to 94.8 Bcfd in February, according to data in EIA's 914 production report going back to 2005.

That gas output drop in February was due to severe weather that froze gas wells and pipes in Texas and other states in the central United States. It followed production increases during the prior three months. Gross gas output peaked at 107.1 Bcfd in December 2019.

In top gas producing states, output fell 15.4% in Texas to 23.5 Bcfd in February, the lowest in a month since February 2018, but held steady near a record high of 21.2 Bcfd in Pennsylvania.

As MRC informed earlier, COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegazs existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex.

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 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
Author:Anna Larionova
Tags:ABS, petroleum products, crude oil, PP, PS, PE, ethylene, propylene, neftegaz, petrochemistry, USA.
Category:General News
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