MOSCOW (MRC) -- A national day of protests on Tuesday threatens to disrupt the supply of oil products as strikes at key refineries continue Monday, according to S&P Global.
Impact has been limited according to traders and analysts, but as concerns and unrest grow there is a real risk of motor fuel stockpiling, product deliveries being blocked and the halting of units.
The industrial action, which started December 5, has been extended several times and all plants were expected to join the general protests on December 17.
Unions could extend the strike action and fully shut down installations at some refineries, with a decision on whether to do so expected Thursday, the CGT union said.
Much will depend on the duration of the protests and strikes, but "in theory dated Brent is likely to be bearish and cracks bullish, especially if refinery runs are seriously affected," said S&P Global Platts Analytics consultant Segio Baron.
"Market reaction is muted, which means the market is not pricing in the impacts of the strikes in a big way, but that could change," he added.
France's seven oil refineries continue to operate normally and only two have problems with product deliveries, the ministry of ecology said Friday.
French oil industry group UFIP said that all refineries are operating, although oil terminals at some sites, including Grandpuits, Donges and La Mede, are blockaded. However, only 1.6% of the 11,000 petrol stations in France face some shortages as of Friday.
Three plants remain on strike including at Grandpuits refinery, its La Mede biofuels plant and Petroineos' Lavera refinery and this industrial action will continue on Tuesday.
Gonfreville is the biggest refinery with a capacity of 247,000 b/d. It endured a fire at the weekend which caused operations to be partially suspended and caused the strike to halt. According to local media reports, there have been several incidents at the plant in recent days, after its start-up from maintenance.
Gonfreville's refinery output represents 12% of France's total refining capacity and the petrochemicals plant accounts for 11% of plastics produced in France. Total confirmed Monday its CDU was offline.
Total's Donges, which has seen some disruption, has a capacity of 219,000 b/d. Donges restarted strike on 18 December for 72 hours but depots nearby are blocked today by industry action.
The strike at France's 109,000 b/d Feyzin refinery had finished and the refinery restarted in early December. However, French labor unions called on employees in all sectors to take part in industrial action against the government's pension reforms.
Supply from other ExxonMobil and Petroineos' refineries has not been affected, UFIP said, which includes the 240,000 b/d capacity Port-Jerome or Gravenchon refinery, the 136,000 b/d Fos refinery as well as Lavera. Staff at ExxonMobil's Fos refinery have been joining the strike on and off, with deliveries partly affected.
Total's Flandres oil depot is also on strike Monday and Tuesday with 1.2 million mt of stocks.
French LNG terminals Fos Tonkin and Montoir-de-Bretagne were also affected, albeit limited, with prices barely moving, indicating how long the French gas market remains.
As MRC informed before, ExxonMobil's cracker at Notre Dame de Gravenchon, France, had an "unexpected stoppage" on Friday, 6 December, following a technical failure this October. Thus, an electric fire Saturday morning, 19 October, 2019, on the ExxonMobil facilities in Notre-Dame-de-Gravenchon (Seine Maritime) resulted in a plume of smoke, below the regulatory thresholds, which could remain visible for several days.
Besides, ExxonMobil halted polyethylene (PE) production at its site in Notre Dame de Gravenchon, France, last week due to commercial reasons, without providing further details. The site houses 500,000 tons/year of linear low density polyethylene (LLDPE) plant, including metallocene linear low density polyethylene (MLLDPE).
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,724,670 tonnes in the first ten months of 2019, up by 7% year on year. Shipments of all PE grades increased. The estimated PP consumption in the Russian market in January-October 2019 totalled 1,066,520 tonnes, up by 7% year on year. Supply of block copolymers of propylene (PP block copolymer) and homopolymer of propylene (homopolymer PP) increased, demand for statistical copolymers (PP random copolymer) decreased.