Oil slides as US pumps more, but OPEC and North Korea loom

MOSCOW (MRC) -- Crude oil slid lower on signs that the United States is continuing to add output, largely counteracting strong economic growth in China and OPEC efforts to cut production, said Reuters.

Benchmark Brent crude futures were down 50 cents at USD55.39 at 1126 GMT. On Thursday, before major markets closed for a holiday break, they settled up 3 cents at USD55.89 a barrel. US West Texas Intermediate (WTI) crude futures were down 47 cents at USD52.71 a barrel, after rising 7 cents to USD53.18 on.

Both benchmarks had risen last week for a third consecutive week, with Brent adding 1.2% over the four days before the Good Friday holiday and WTI up 1.8%. While trading was subdued, the focus was on indications that shale oil output in the United States was pushing higher.

"All the signs of an ever-growing bull market are starting to fade away, (with) Libya and geo-political tensions easing, but also because the Texans are back and they are pumping like there's no tomorrow," said Matt Stanley, a fuel broker at Freight Investor Services (FIS) in Dubai. "If I were OPEC, I'd be pretty worried."

Although the failure of a ballistic missile launch in North Korea brought some respite, markets were braced for further tensions in the region.

In Libya, fighting between rival factions has cut oil output, but state oil company NOC was able to reopen at least one field and was pushing to reopen another. US drillers last week added rigs for a 13th straight week, bringing it to its highest in roughly two years. Investors are also pouring money into the industry, suggesting US output gains will continue.

Increasing US output is undermining attempts by the Organization of the Petroleum Exporting Countries and other major oil producers to curb output and sustain a price rally in a market that has been oversupplied since mid-2014.

While Iran fueled hopes that OPEC and non-OPEC oil producers could extend their output cuts beyond the six-month agreement, Saudi energy minister Khalid al-Falih said it was too early to discuss an extension. US crude oil production reached 9.24 MMbpd, according to the latest Energy Information Administration data, making it the world's third-largest producer after Russia and Saudi Arabia.

The increasing production largely counteracted figures showing first quarter economic growth of 6.9% in China. Forecast-beating March investment, retail sales and exports all suggested China's economy, the world's second-largest oil consumer, may carry solid momentum into spring.

China's March refinery throughput also rose to 11.19 MMbpd, just shy of December's record, as margins remained attractive.

LG Chem posts record-breaking sales in Q1

MOSCOW (MRC) -- LG Chem said that it posted 796.9 billion won (USD698 million) in operating profit, a 74 percent rise on-year, said Koreaherald.

It also posted 6.4 trillion won in sales, a 33 percent increase, for the same period. The battery firm said the strong earnings were brought about by the record-breaking operating revenue in its basic material business, the turnaround in its information electronics materials and profit increases in its life science unit.

Its basic material unit posted 4.4 trillion won in sales and 733 billion won in operating income, a 28 percent and 57 percent on-year increase, respectively, due to clients’ growing need to secure inventory in a strong oil price environment and good performance in the Chinese market.

"The stable performance is expected to continue as the favorable market situation of basic materials is predicted to continue in the second quarter," a LG Chem spokesperson said.

As MRC informed earlier, LG Chem had decided to drop a plan to jointly build a USD4.2-billion petrochemical complex in Kazakhstan, citing a prolonged slump in oil prices and a sharp increase in facility investments.

LG Chem Ltd., often referred to as LG Chemical, is the largest Korean chemical company and is headquartered in Seoul, South Korea. According to ICIS report, it is 15th biggest chemical company in the world in 2011. It has eight domestic factories and global network of 29 business locations in 15 countries. LG Chem is a manufacturer, supplier, and exporter of petrochemical goods, IT&E Materials and Energy Solutions.

Akzo Nobel posts flat net profit in first quarter

MOSCOW (MRC) -- Dutch paint and chemicals giant Akzo Nobel NV AKZA reported a flat net profit for the first quarter of 2017, while guiding for higher profitability during the full year, said the company on its site.

Net profit for the period ended March was 240 million euros (USD257.5 million), on par with net profit during the same period a year earlier.

The company said it expects earnings before interest and taxes to be roughly EUR100 million higher than in 2016, which came in at EUR1.5 billion (USD1.61 billion).

Quarterly revenue rose 7% to EUR3.67 billion, mainly as a result of higher volumes and acquisitions.

As MRC wrote earlier, in December 2016, AkzoNobel finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport, strengthening its position as the global number one supplier in coil coatings. The transaction included relevant technologies, patents and trademarks, as well as two manufacturing plants in the United Kingdom and South Africa.

Akzo Nobel N.V., trading as AkzoNobel, is a Dutch multinational, active in the fields of decorative paints, performance coatings and specialty chemicals. Headquartered in Amsterdam, the company has activities in more than 80 countries, and employs approximately 55,000 people.


Saudi Arabia pushes ahead with renewable drive to diversify energy mix

MOSCOW (MRC) -- Saudi Arabia aims to produce 10% of its power from renewable sources in the next six years as it pushes ahead with a multi-billion-dollar plan to diversify its energy mix and free up more crude oil for export, said Reuters.

The drive by the world's top oil exporter will see the kingdom developing 30 solar and wind projects by 2023 to boost its electricity generation and reduce crude oil burning. Saudi Arabia is targeting 9.5 gigawatt (GW) of renewable energy by 2023. The renewables initiative involves investment estimated between USD30 B and USD50 B.

Saudi Energy Minister Khalid al-Falih kicked off the massive renewable program in Riyadh on Monday by announcing the beginning of the bidding process for a 300 MW solar power project, which is expected to come online by 2018-2019. "The energy mix to produce electricity will change, today the kingdom uses large quantities of oil liquids, including crude, fuel oil and diesel," Falih said. "So the percentage of renewable energy by 2023 (will be) 10% of total installed capacity in the kingdom."

Under an economic reform program launched last year, known as Vision 2030, Saudi Arabia is seeking to use non-oil means to generate much of its additional future energy needs to avoid running down oil resources and diversify its economy.

The kingdom is restructuring its energy sector as part of Vision 2030 and a focus on renewable projects is a pillar of this transformation as it would help develop the private sector and create thousands of jobs.

"Since the restructuring of the energy sector ... one of our key priorities is to engage with the private sector," Falih said, adding he was confident the program would be delivered.

Saudi Arabia has short-listed 27 companies for its solar power project and 24 firms for its wind project, the energy ministry said last week. France's EDF Energies Nouvelles, Japanese companies Marubeni Corp and Mitsui & Co and Saudi Acwa Power are among the firms which have qualified to bid for the 300 MW solar PV project in Sakaka, the al-Jouf Province in the north of the kingdom.

Abu Dhabi Future Energy Company (Masdar), GE, Marubeni Corporation, Mitsui & Co., JGC Corp, SNC Lavalin Arabia and Iberdrola Renovables Energia are among those qualified to bid for the 400 MW wind farm project in Midyan in the northwest.

The kingdom also plans to launch a second bidding round for 400 MW of wind power at a project in Domat al-Jandal in al-Jouf Province by the fourth quarter of this year, which will be followed by 620 MW of solar power, Turki Shehri, head of the renewable energy project development office at the energy ministry told reporters on Monday. "This will come in stages. It (wind power project) will come in the fourth quarter of this year with Domat al-Jandal, and then the 620 MW (solar) will come immediately after that in phases," he said.

The projects will be tendered on a build, operate and own basis, meaning the companies which win the projects will retain ownership for 20 years for the solar plants and 25 years for the wind, Shehri said. State oil giant Saudi Aramco would be interested in investing in the second bidding round for renewable projects as it aims to play a major role in the sector, Abdulaziz al-Judaimi, senior vice president for downstream at Aramco said.

Aramco, which is preparing to list up to 5% of its shares by next year, has created a department for renewables within the company to develop wind and solar projects.

Output of main products from polymers in Russia rose by 4.8% in Q1 2017

MOSCOW (MRC) -- March output of the main products from polymers and rubber in Russia grew by 7.1% year on year, whereas output of these products increased by 4.8% in the first quarter of 2017, reported MRC analysts.

According to the Russian Federal State Statistics Service, March production of plastic pipes, hoses and fittings rose to 38,100 tonnes, up by 24.6% from a month earlier. Overall output of these polymer products reached 94,200 tonnes in the first quarter of 2017, down by 5.6% year on year.

Last month's production of unreinforced and non-combined films was 90,200 tonnes versus 77,300 in February. Output of film products grew by 7.4% year on year over the stated period, totalling 230,300 tonnes.

March production of boards, sheets and non-porous sheets rose to 28,000 tonnes, compared to 27,000 tonnes a month earlier. Overall output of these products grew to 76,800 tonnes in January-March 2017, up by 9.8% year on year.

Last month's production of boards, sheets and porous polymer films was 20,000 tonnes, whereas this figure was 17,400 tonnes a months earlier. Total production of these polymer products dropped by 5.6% year on year in the first three months of 2017 to 52,500 tonnes.

March production of plastic windows and window sills remained at the level of February, totalling about 1.2 million square metres. Output of these products was slightly less than 3.2 million square metres in the first three months of 2017, down by 8% year on year.

Last month's production of plastic door blocks and doorsteps rose to 67,300 square metres, compared to 62,100 square metres in February. Overall output of these polymer products fell by 7% year on year in January-March 2017 to 177,100 square metres.