MOSCOW (MRC) -- Oil futures settled lower Oct. 19 as overnight optimism that the White House and congressional Democrats could reach a deal on stimulus spending faded in afternoon trading, reported S&P Global.
NYMEX November WTI settled 5 cents lower at USD40.83/b, and ICE December Brent was down 31 cents at USD42.62/b.
Oil futures had been holding around even in early US trading but began moving steadily lower mid-day as stimulus hopes faded ahead of an Oct. 19 meeting between House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin.
On Oct. 18, Pelosi issued a 48-hour deadline for the White House to reach a deal on spending in order to pass a bill ahead of the November elections.
NYMEX November RBOB settled 65 points lower at USD1.1623/gal, and November ULSD was down 2.1 cents at USD1.1581/gal.
Oil price declines extended in aftermarket trading, especially for RBOB, which at 1645 GMT was down 1.12 cents at USD1.1576/gal.
Ministers on a key OPEC+ monitoring committee acknowledged a slowdown in the oil market's recovery and vowed to be proactive in preventing a slide in prices, with the scheduled tapering of the coalition's output cuts looming at year's end.
"We will do what is necessary in the interest of all," Saudi energy minister Prince Abdulaziz bin Salman said in his opening remarks to the OPEC+ Joint Ministerial Monitoring Committee meeting Oct. 19.
"Crude prices remained heavy after both the OPEC+ JMMC meeting did not discuss any changes to the tapering plan and as stimulus disagreements remain and the prospects of getting a deal done fade into next year," OANDA senior market analyst Edward Moya said in a note. "The Saudis and Russians are getting along, but it will get ugly real fast if the fall surge/winter wave of the virus delivers a greater hit to the demand outlook."
OPEC and 10 partners are set to ease their 7.7 million b/d collective production cuts by about a quarter to 5.8 million b/d at the start of 2021, but fading demand growth and the resurgence of Libyan supplies have muddled the path to more stable and higher oil prices.
Delegates have told S&P Global Platts the bloc may consider extending the cuts, but any new deal would require delicate political negotiations and potentially some concessions to countries weary of reining in production.
The ICE WTI-Brent spread narrowed to minus USD1.59/b in afternoon trading, the tightest spread since mid-March as resurgent European oi demand outlooks dimmed amid a resurgence of COVID-19 coronavirus.
As MRC informed earlier, global oil demand is forecast to peak by around 2040 because transport-fuel demand will decline steeply and economic growth will slow in the post-coronavirus world, the Institute of Energy Economics, Japan, said in its annual IEEJ Outlook 2021 on Oct. 15.
We remind that global oil demand may have already peaked, according to BP's latest long-term energy outlook, as the COVID-19 pandemic kicks the world economy onto a weaker growth trajectory and accelerates the shift to cleaner fuels.
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.
And 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 1,496,500 tonnes in the first eight months of 2020, up by 5% year on year. Shipments of all ethylene polymers increased, except for linear low desnity polyethylene (LLDPE). At the same time, PP shipments to the Russian market reached 767,2900 tonnes in the eight months of 2020 (calculated using the formula - production minus exports plus imports - and not counting producers' inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
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