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Oil prices grow on eased lockdowns in the US and Europe desire to attract travellers

May 05/2021

MOSCOW (MRC) -- Oil prices rose on Tuesday after more US states eased lockdowns and the European Union sought to attract travellers, while soaring COVID-19 cases in India capped gains, reported Reuters.

Brent crude futures were 86 cents, or 1.27%, higher at $68.42 a barrel at 1224 GMT, after climbing 1.2% on Monday.

US West Texas Intermediate (WTI) crude futures also rose 77 cents, or 1.19%, to USD65.26 a barrel, after gaining 1.4% on Monday. Both contracts were up over USD1, or about 2%, in earlier trade.

Prices are being supported by the prospect of a pick-up in fuel demand as New York state, New Jersey and Connecticut were set to ease pandemic curbs and the EU planned to open up to more foreign visitors who have been vaccinated, analysts said.

For further signs of rising US oil demand, traders will be watching for reports on crude and product stockpiles from the American Petroleum Institute on Tuesday and the US Energy Information Administration on Wednesday.

Five analysts polled by Reuters estimated on average that US crude inventories fell 2.2 million barrels in the week to April 30. Oil inventories rose in the previous two weeks.

The rate of refinery utilisation was expected to have increased by 0.5 percentage points last week, from 85.4% of total capacity in the week ended April 23, according to the poll.

A weaker dollar, hit by an unexpected slowdown in US manufacturing growth, also helped shore up oil prices on Tuesday. The lower dollar makes oil more attractive to buyers holding other currencies.

In India, the total number of infections so far rose to just short of 20 million after the country saw more than 300,000 new cases for a 12th straight day, which is expected to hit fuel demand in the world's most populous country after China.

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.


mrcplast.com
Author:Margaret Volkova
Tags:Europe, PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, Gazprom neft, Sibur Holding, Shurtans Gas-Chemical Plant, India, China, Russia, USA, Uzbekistan.
Category:General News
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