MOSCOW (MRC) -- Oil prices edged higher last Friday but were on track for their first weekly fall as new US coronavirus cases spiked, raising the prospect of a second wave hitting demand, reported Reuters.
Brent was up 27 cents, or 0.7%, at USD38.82 a barrel by 1204 GMT, having lost more than USD1 earlier in the session.
After falling more than 5% on Friday, West Texas Intermediate was up 19 cents, or 0.52% to USD36.53 a barrel. Both contracts ended around 8% lower on Thursday.
The oil benchmarks are heading for weekly declines of more than 8%, their first after six weeks of gains which have lifted them off their April lows.
Fears that the coronavirus pandemic may be far from over has brought the rally to a halt, with about half a dozen US states seeing a spike in new infections.
Barclays on Friday raised its oil price forecasts for this year by USD4 per barrel, citing a bigger deficit in the second half of the year, although it expressed caution on a slow recovery in the near term.
"The rate of change in fundamentals is likely to moderate significantly as incremental demand improvement will depend more on consumer behaviour than the easing of enforced movement restrictions," the British bank said in a note.
Producers from the United States, as well as from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, have been cutting supply.
OPEC+ cut oil supplies by 9.7 million barrels per day (bpd), about 10% of pre-pandemic demand, and agreed last weekend to extend the reduction.
US crude and gasoline stockpiles grew last week, government data showed. US crude inventories hit a record 538.1 million barrels, as cheap imports from Saudi Arabia flowed into the country.
As MRC informed previously, global oil consumption cut by up to a third in Q1 2020. What happens next in the oil market depends on how quickly and completely the global economy emerges from lockdown, and whether the recessionary hit lingers through the rest of this year and into 2021.
Earlier this year, BP said the deadly coronavirus outbreak could cut global oil demand growth by 40 per cent in 2020, putting pressure on Opec producers and Russia to curb supplies to keep prices in check.
We remind that, in September 2019, six world's major petrochemical companies in Flanders, Belgium, North Rhine-Westphalia, Germany, and the Netherlands (Trilateral Region) announced the creation of a consortium to jointly investigate how naphtha or gas steam crackers could be operated using renewable electricity instead of fossil fuels. The Cracker of the Future consortium, which includes BASF, Borealis, BP, LyondellBasell, SABIC and Total, aims to produce base chemicals while also significantly reducing carbon emissions. The companies agreed to invest in R&D and knowledge sharing as they assess the possibility of transitioning their base chemical production to renewable electricity.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.