Saudi Arabia may cut February heavy crude prices to Asia

MOSCOW (MRC) - Top oil exporter Saudi Arabia is expected to cut February prices for heavier crude grades sold to Asia due to weaker fuel oil margins, respondents to a Reuters survey said.

Weak refining margins and an expected drop in Asia’s crude demand during second-quarter refinery maintenance were also factors that may prompt Saudi Arabia to cut prices in February, the respondents said.

The official selling prices (OSPs) for Arab Medium and Arab Heavy crude grades are expected to fall by up to 50 cents a barrel in February from the previous month, according to the four refiners participating in the survey.

“Arab Heavy was too expensive in the past few months,” said one of the respondents who expected a price cut of 50 cents.

Typical margins at a complex refinery in Singapore DUB-SIN-REF averaged about $2.84 a barrel in December, the lowest since August 2013, data on Refinitiv Eikon showed.

A 15-cent drop in the price spread between the first and third month DME Oman crude futures may also prompt Saudi Arabia to lower OSPs, the respondents said. DME Oman accounts for half of the underlying Saudi OSP benchmark for Asia.

The same respondents also expect a 20-50 cent cut for the February Arab Extra Light OSP.

The United States has surpassed Russia and Saudi Arabia as the world’s biggest oil producer, with overall crude production hitting an all-time high of 11.537 million barrels per day in October.

Still, Asia’s demand for Saudi crude is set to rise this year as new refineries starting up in the first half of 2019 have committed to buying long-term Saudi oil. Saudi crude OSPs are usually released around the fifth of each month, and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day (bpd) of crude bound for Asia.

State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.

Saudi Aramco officials as a matter of policy do not comment on the monthly OSPs.
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced price increases for all polycarbonate (PC) grades in Europe, as per the company's press release.

Effective January 7, 2019, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

- CALIBRE PC resins - by EUR300 per metric ton.

As MRC informed before, Trinseo last raised its prices for PC grades on 1 July 2018, as stated below:

- CALIBRE PC resins - by EUR100 per metric ton.

And previously, the company increased its PC prices in Europe on 1 May, 2018. Then, the rise was EUR70 per metric ton.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD4.4 billion in net sales in 2017, with 16 manufacturing sites around the world, and approximately 2,200 employees.
MRC

MOSCOW (MRC) - India’s biggest refiner Indian Oil Corp Ltd said on Wednesday that Iran may still invest in a refinery expansion project at one of its subsidiaries, said Reuters.

Indian Oil’s chairman Sanjiv Singh said that Iran has not ruled out participating in the expansion at Chennai Petroleum Corp Ltd, a south India-based 20,000 barrels per day (bpd) refinery. Iran’s participation has been questioned after India cut back its Iranian crude oil imports following U.S. sanctions.

However, Singh’s comments come a few days after India exempted rupee payments to the National Iranian Oil Co (NIOC) for crude oil imports from a withholding tax.

The exemption will allow Indian refiners to settle about USD1.5 billion of outstanding payments to NIOC through direct rupee payments.

It has been expected that these payments could help Iran invest in Indian projects, particularly the Chennai Petroleum Corp expansion.

"Iran has always been positive with this (the new rules). I think they should be able to invest," Singh told Reuters, following a media conference on Wednesday.

Chennai Petroleum plans to invest up to 356.98 billion rupees (USD5.1 billion) to replace the 20,000 bpd Nagapattinam refinery in Southern Tamil Nadu state with a 180,000 bpd plant.

Naftiran Intertrade, the Swiss subsidiary of National Iranian Oil Company, holds a 15.4 per cent stake in Chennai Petroleum, while Indian Oil has about a 52 percent share.

Singh said a detailed feasibility report for the expansion has yet to be prepared.
MRC

MOSCOW (MRC) -- The Welsh government environment agency, Natural Resources Wales (NRW), has issued an enforcement notice to suspend two fuel pipelines on the Valero refinery jetty in Milford Haven, reported Reuters with reference to the agency.

"The notice was issued after pollution incidents affected water, land and wildlife along the coast in December and the first week of January," NRW said.

The US company last week reported a petroleum product leak into the Milford Haven Waterway.

Valero operates the 220,000 barrel per day Pembroke oil refinery.

As MRC wrote earlier, in late February 2018, CB&I announced that its CDAlky technology had been selected by Valero Refining - New Orleans LLC for its St. Charles Alkylation Project located in Norco, Louisiana. CB&I's overall scope of supply on the project includes CDAlky technology license, basic engineering and proprietary equipment. When it becomes operational in 2020, the new CDAlky unit will produce 25,000 BPD alkylate from FCC-derived olefin feedstocks.
MRC

MOSCOW (MRC) -- Tianjin Wison China Holding Company and Tianjin Development Zone Administrative Committee officially entered into an "Investment and Cooperation Agreement on Light Hydrocarbons Comprehensive Utilization Project" at the Investment Service Center of Tianjin Development Zone, said Hydrocarbonprocessing.

Phase 1 of the project has investment at around 15 billion yuan and an area of about 1.7 million square meters, mainly including 1 Mtpa light hydrocarbons cracking unit, downstream units for high-density polyethylene (HDPE), linear low density polyethylene (LLDPE), acrylonitrile, and butadiene, as well as supporting utilities and auxiliary production facilities.

By leveraging its proprietary and internationally advanced process technology, cheap and abundant light hydrocarbon (LPG) is used as the feedstock to produce basic chemical raw materials such as ethylene and propylene, and high-end chemicals such as polyethylene and acrylonitrile to meet the growing domestic and international high-end market demands. In addition, a truly smart demonstration plant will be built with Wison’s comprehensive advantage in digital design and chemical big data.

Wison is a diversified group mainly providing energy and chemical services, which range from the storage and utilization of primary energy such as coal, oil and natural gas, onshore energy engineering services, marine engineering equipment fabrication to the development of downstream new chemical materials. Wison (China) Holding Company is a subsidiary of Wison Group for the new chemical materials business that globally acquires light hydrocarbon raw materials, builds and operates olefin and its downstream production units, and works on the R&D of high-end new chemical materials. The company is dedicated to building high value-added light hydrocarbon and new materials industrial parks.

Tianjin Nangang Industrial Zone, where the project is signed, is a petrochemical industrial base in Tianjin. It has a favorable port and location, convenient logistics and transportation infrastructure, and mature utilities, which serves as a solid base for realization and future development of the project.
MRC