MOSCOW (MRC) -- Crude oil futures were trading lower in mid-morning trade in Asia June 18 after latest US inventory data showed a rise in crude stockpiles for a second consecutive week, while fears of a resurgence in COVID-19 cases dampened demand recovery, reported S&P Global.
At 10:10 am Singapore time (0210 GMT), ICE Brent August crude futures were down 58 cents/b (1.42%) from the June 17 settle at USD40.13/b, while the NYMEX July light sweet crude contract was 76 cents/b (2%) lower at $37.20/b.
US commercial crude stocks climbed 1.22 million barrels to a fresh all-time high of 539.28 million barrels in the week ended June 12, US Energy Information Administration data showed June 17.
"We maintain our view that while we expect prices to continue increasing through the year, oil is expected to see short-term bearish pressures as we head towards the end of Q2," OCBC analysts said in a June 18 note.
While optimism came from a drawdown in gasoline and distillate stocks, the indicative improvement in demand failed to uplift sentiment as fresh COVID-19 outbreaks in the US and China continued to cast doubt on recovery.
China continues to tackle a potential resurgence in COVID-19 cases, reporting 28 new coronavirus cases as of end-June 17, media reports showed. Out of this, 21 cases were in Beijing.
The US recently saw record spikes in COVID-19 cases in six states as the economy gradually reopens.
On the OPEC+ front, the Joint Ministerial Monitoring Committee will meet via webinar later in the day.
Delegates had said the JMMC meeting is likely to focus on assessing compliance with quotas in May, and calculating volumes that over-producing countries will have to compensate for with additional cuts this summer.
In its latest monthly oil market report released June 17, OPEC kept its 2020 forecasts largely unchanged from the May outlook, noting a historic contraction in oil demand, but improving fundamentals in the months ahead.
As MRC informed before, 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.
MRC