MOSCOW (MRC) -- Crude oil futures were lower in mid-morning trade in Asia Sept. 9 as the global crude complex continued to grapple with a weak demand outlook at the end of the US driving season and a rise in COVID-19 infections worldwide, reporte S&P Global.
At 10:46 am Singapore time (0246 GMT), ICE Brent November crude futures were down 20 cents/b (0.50%) from the Sept. 8 settle at USD39.58/b, while the NYMEX October light sweet crude contract was 24 cents/b (0.65%) lower at USD36.52/b.
"Downward pressure on oil has continued, with ICE Brent futures closing more than 5% lower yesterday, and crucially below the $40/b level. There was no clear catalyst for the move, however a stronger US dollar and weaker equities would have done little to help sentiment, not just for oil, but the broader commodities complex," ING analysts said in a note Sept. 9.
The global crude complex has retreated in recent days as a multitude of negative factors weighed heavily on market sentiment. These include the end of the US driving season and the start of the extended maintenance season for US refineries, which will see a tapering of demand for gasoline and crude, as well as slower buying by China in August as its stocks approach maximum storage capacity.
Combined with a stronger dollar and weaker risk sentiment, which further dented demand across the commodities complex, ICE Brent futures have fallen 13.7% in two weeks since settling at USD45.86/b Aug. 25, a two-week high, while WTI has fallen 15.8% since settling at USD43.39/b on Aug. 26, S&P Global Platts data showed.
As a result, front-month inter-month timespreads for ICE Brent futures have turned significantly more bearish, with the November/December timespread assessed at minus 55 cents/b Sept. 8, Platts data showed.
"Timespreads continue to edge deeper into contango, while the physical market is weaker; over the last few days we have had both Aramco from Saudi Arabia and Abu Dhabi National Oil Company, or ADNOC, from the UAE cutting official selling prices for their crude oil. Both of their flagship grades are now at discounts to their benchmark, which is not a great signal for demand," ING analysts said in a note Sept. 9.
ADNOC set the October OSP for its flagship Murban crude at Platts Dubai minus 50 cents/b, down USD1.35/b from September, and medium sour Upper Zakum grade at a discount of 70 cents/b against Platts Dubai, down USD1.35/b, Platts earlier reported.
Meanwhile, global COVID-19 infections continue to rise to more than 200,000 infections/day, while global deaths approach the 900,000 mark, latest John Hopkins University data showed.
Market participants were awaiting the release of weekly US inventory reports by the American Petroleum Institute later Sept. 9 and the Energy Information Administration on Sept. 10 for fresh cues on price direction.
At 10:46 am Singapore time (0246 GMT), the US dollar index stood at 93.510, up 0.07% from the previous close at 93.441, while the NYMEX October RBOB stood at USD1.0985, down 0.39% from its previous settle at USD1.1028/gal.
As MRC informed before, Abu Dhabi National Oil Co, the UAE's biggest energy producer, and Abu Dhabi conglomerate ADQ will set up an investment platform to fund local chemicals projects amid a push to invest USD45 billion in downstream activities. The joint venture will oversee the development of projects in the planned Ruwais Derivatives Park, which is part of the Ruwais industrial hub in the emirate of Abu Dhabi, ADNOC said in its statement in late July. The venture will allow ADNOC to further its aims to boost operations in petrochemicals and other downstream lines. It didn't disclose funds being made available.
We remind that in early May, 2020, ADNOC began a gradual restart of its Ruwais oil refinery complex after a scheduled maintenance shutdown. The Ruwais complex, which has capacity of 835,000 barrels per day, was shut down early this year, the ADNOC spokesman said.
And in late July 2019, ADNOC said its Ruwais refinery west cracker was offline for maintenance.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.