MOSCOW (MRC) -- Crude oil prices rose about 6% last Wednesday after a ship ran aground in the Suez Canal, and worries that the incident could tie up crude shipments gave prices a boost after a slide over the previous week, reported Reuters.
The crude benchmarks, US crude and London-based Brent, added to gains after US inventory figures showed a further rebound in refining activity, suggesting US refiners are mostly recovered from the cold snap that slammed Texas in February.
Brent crude settled at USD64.41 a barrel, gaining USD3.62, or 6%, after tumbling 5.9% the previous day. West Texas Intermediate (WTI) settled at USD61.18 a barrel, rising USD3.42, or 5.9%, having lost 6.2% on Tuesday.
The gains appeared to stabilize the market that had slumped from early this month, when prices hit their highest levels this year on expectations for demand recovery. Those hopes have since been dashed as European nations re-entered lockdowns to halt another wave of the pandemic.
Oil has recovered from historic lows reached last year as OPEC and its allies made record output cuts. On Tuesday, both benchmarks touched their lowest since February.
Ten tug boats struggled on Wednesday afternoon to free one of the world’s largest container ships after it ran aground and blocked the Suez Canal for more than a day, port agent GAC said.
The GAC said the information it had received earlier claiming the vessel was partially refloated, allowing traffic to resume along the fastest shipping route from Europe to Asia, was inaccurate.
Oil prices were also supported by US Energy Information Administration data that showed refinery runs recovering after a winter storm shut Texas refineries last month.
“The refiners are coming out of maintenance and recovering from the power outages. The expectation is now that they’re getting back to work, we will see crude inventories trending lower in the coming weeks,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Italy, France and other European countries have re-imposed movement restrictions. But German Chancellor Angela Merkel said she was reversing a decision for a stricter Easter shutdown.
As MRC informed before, the largest US refinery, Motiva Enterprises’ 607,000 barrel-per-day Port Arthur, Texas, plant, returned to normal operations. The refinery was shut on Feb. 15 when freezing temperatures, rarely seen on the US Gulf Coast, knocked out steam supply. Motiva began restarting the refinery on Feb. 24.
Motiva Chemicals has also resumed operations at its mixed-feed cracker in Port Arthur, USA. The process of restart of this cracker with the capacity of 635,000 mt/year of ethylene and 340,000 mt/year of propylene began on 27 February, 2021, and finished late last week. The cracker wa shut along with the refinery at the same site on 14 February, 2021, because of the deep freeze.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC