MOSCOW (MRC) -- U.S. crude oil stockpiles rose unexpectedly last week, while refineries hiked output to their capacity usage since March, the Energy Information Administration said, said Hydrocarbonprocessing.
Crude inventories rose by 4.4 million barrels in the week to Jan. 15, compared with analysts' expectations for a decrease of 1.2 million barrels. Refinery utilization rates rose by 0.5 percentage points to 82.5% of total capacity, their highest since March, EIA data showed, a potential signal of optimism that demand will rebound in coming months. Refinery crude runs rose by 110,000 barrels per day.
"The refinery runs came in better, so basically the market is getting a little support on the fact that we are seeing continued improvement in demand," said Phil Flynn, senior analyst at Price Futures Group in Chicago. Crude stocks at the Cushing, Oklahoma, delivery hub for futures fell by 4.7 million barrels to 52.5 million barrels, their lowest since August, the EIA said.
Oil prices pared their losses after the data. U.S. crude was off by 60 cents, or 1.1%, to USD52.53 a barrel as of 11:18 a.m. EST (1618 GMT), while Brent fell 60 cents to USD55.49 a barrel. Gasoline stocks fell by 260,000 barrels, compared with analysts' expectations in a Reuters poll for a 2.8 million-barrel gain.
Distillate stockpiles, which include diesel and heating oil, rose by 458,000 barrels, versus expectations for a 1.2 million-barrel increase, the EIA data showed. Net U.S. crude imports rose last week by 566,000 bpd.
As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.
We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.
We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.