Petrobras reduces its May fuel prices even as oil goes up internationally

MOSCOW (MRC) -- Brazilian oil company Petrobras has lowered diesel and gasoline prices at refineries by about 5 cents per liter since 1 May, 2021, reported Reuters with reference to the Brazilian Association of Fuel Importers (Abicom) and consultancy and brokerage StoneX.

The move would be the first under the management of General Joaquim Silva e Luna, who replaced Roberto Castello Branco as the company's top executive after the government apparently disagreed with the state-run company's fuel pricing policy.

Petrobras did not immediately comment on the matter.

After landing the top job at Petrobras, Luna said he would look to avoid volatility in the domestic fuel market while not "disrespecting" international price parity.

In a note on Friday, brokerage Ativa Investimentos said its model indicated a potential 13% rise in gasoline prices, driven by the increasing international oil prices.

As MRC informed before, in December 2020, it became known that Petrobras was seeking 800 million reais (USD152 million) in compensation from engineering group Odebrecht in arbitration proceedings over its alleged violation of the shareholders agreement in petrochemical company Braskem.

We remind that Petrobras may need more than a year to divest its stake in Braskem, said Andrea Almeida, Petrobras CFO, in early July, 2020. She said during the company"s recent webinar that Petrobras plans to give more time for potential investors to make offers for the company"s assets, including for its refineries and stakes at its petrochemical and fuel distribution affiliates. The divestment of Petrobras's stake in Braskem in 2020 would be desirable but "might not be possible" as the COVID-19 pandemic has changed market conditions, she said. The company plans to close part of its refinery sales in 2021. In December, Roberto Castello Branco, CEO of Petrobras, said that he wants to sell the company's stake in Braskem within a year. Petrobras owns 32.15% of Braskem.

We also remind that Braskem is no longer pursuing a petrochemical project, which would have included an ethane cracker, in West Virginia. And the company is seeking to sell the land that would have housed the cracker. The project, announced in 2013, had been on Braskem's back burner for several years.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.

Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm. Petrobras" activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trade and transport of oil and oil products, natural gas and other fluid hydrocarbons, in addition to other energy-related activities.

Chevron profit fell 29% in Q1

MOSCOW (MRC) -- Chevron's first-quarter profit fell 29% from the same period a year ago as gains from oil and gas prices were undercut by weaker refining margins, production losses and the impact of an asset sale that benefited results last year, said Hydrocarbonprocessing.

Oil companies are generally enjoying a recovery in energy prices, up at least a third this year, after the pandemic hammered demand at the start of 2020. Chevron and its peers slashed spending, paving the way for several firms to post sharply better results.

But as European rivals topped forecasts, Chevron's earnings declined on winter storm production losses, weaker margins and the absence of asset and tax items that benefited year-ago profit. "Results were down from a year ago due in part to ongoing downstream margin and volume effects resulting from the pandemic and the impacts of winter storm Uri," Michael Wirth, Chevron's chief executive officer, said, referring to the plunging temperatures that hit Texas and other states in February.

The winter storm cost USD300 million in lost production and repairs, said finance chief Pierre Breber. "That's lost production in the Permian Basin and lost production in refining and chemicals," he said. Chevron, the second-largest U.S. oil producer, reported a profit of USD1.72 billion, or 90 cents per share, compared with USD2.45 billion, or USD1.31 per share, a year earlier. Year-ago results included about USD680 million in asset sales and favorable tax items.

Net profit was USD1.4 billion, or 72 cents a share, down from USD3.6 billion, or USD1.93 cents a share, a year earlier. Shares dipped 2% to USD104.69 in morning trading on Friday.

Chevron's cash flow from operations, at USD4.2 billion, was more than USD1 billion below Wall Street estimates, according to Refinitiv IBES data. Its expenses for debt costs, employee pensions and benefits more than doubled to USD978 million. Weaker-than-expected cash generation "left a slightly higher net debt position than expected," of $38.3 billion, said analyst Biraj Borkhataria at RBC Europe Limited.

While Chevron boosted its dividend this week, "investors will need to be patient" for share repurchases, Borkhataria said. The 3.9% dividend increase was a surprise as "most investors expected a more modest 2% dividend hike later in the year," said Manav Gupta, analyst at Credit Suisse.

The weaker earnings contrasted with those at BP, Royal Dutch Shell and Total, which reported results that topped year-ago levels. BP nearly tripled earnings while Total posted a 69% gain. Chevron's refining eked out a USD5 million profit, down from USD1.1 billion a year ago, as the pandemic continued to mute demand for jet fuel, diesel and gasoline, and the winter storm hurt U.S. operations.

Earnings from oil and gas production fell 20% despite price gains as non-U.S. operations suffered from declining volumes, foreign currency impacts and the absence of an asset sales gain. The unit benefited from higher oil volumes from the acquisition of Noble Energy in October. Chevron said capital spending for the first quarter was USD2.5 billion, down from USD4.4 billion in the same period last year.

The company will restrain spending this year, including in U.S. shale. "The stock markets are not sending a signal to us or our sector to increase capital," Breber said. Chevron is looking toward a "sustained global recovery" before increasing activity, Breber said, adding that OPEC and allies are easing their oil production curbs.

The United States accounts for more than half of Chevron's capital spending, up from one-quarter five years ago, with last year's Noble purchase increasing the company's U.S. focus, said Peter McNally, analyst at Third Bridge Group.

As per MRC, Chevron Phillips Chemical (CP Chem), one of the world's largest petrochemical companies, halted production at cracking unit 1592 in Cedar Bayou, TX, USA on April 26 for routine maintenance. It is expected that repairs at this enterprise with a capacity of 850 thousand tons of ethylene per year will continue until May 3 of this year. Chemical emissions to the atmosphere are expected within about seven days.

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.

Chevron Corporation is one of the world's leading full-cycle oil companies "from well to end user" and one of the largest companies in the world by market capitalization. Chevron Phillips Chemicals Company LP is a 50/50 joint venture between ConocoPhillips and Chevron Corporation. Chevron Phillips combines Chevron and ConocoPhillips' technologies and chemicals. Annual sales are USD7 billion.

Indian Reliance becomes largest domestic medical-grade liquid oxygen producer

MOSCOW (MRC) -- Amid a surging second wave of COVID-19 in the country, Reliance Industries (RIL) has increased output of medical oxygen to 1,000 mt/day, making it India's largest producer of medical-grade liquid oxygen from a single location, according to IndiaTV.

Reliance ramped up production from near-zero to 1,000 tonnes per day and now produces over 11% of the country's oxygen demand. It has rallied its resources to meet the daily need of over 1 lakh people every day.

"RIL ramps up production of medical-grade liquid oxygen from near zero to 1000 mt per day free of charge. (It is producing) 1000 mt of oxygen to meet the needs of over 1 lakh people every day on an average," the company said in a statement.

It had also airlifted 24 ISO containers for transporting Oxygen from Saudi Arabia, Germany, Belgium, The Netherlands and Thailand - creating an additional 500 tonnes of transportation capacity for India.

"As India grapples with an unprecedented new wave of the COVID pandemic, Reliance has risen to the occasion by making an all-out effort to save precious lives," the statement said.

The oxygen manufactured by the company would be provided free-of-cost to several states across the country to bring immediate relief to over 1 lakh patients on a daily basis. Since the beginning of the pandemic in March last year, Reliance has supplied over 55,000 MT of medical-grade liquid oxygen across the country.

"At its refinery-cum-petrochemical complex in Jamnagar and other facilities, Reliance now produces over 1,000 tonnes of medical-grade liquid oxygen per day - or over 11% of India's total production - meeting the needs of nearly every one in ten patients," it said.

The firm's oil refineries and petrochemical plants produce industrial oxygen as part of processes. This was scrubbed to produce high-purity medical grade oxygen. Also, it converted nitrogen tankers into transport trucks to move medical grade oxygen.

As MRC reported earlier, RIL shut its polyvinyl chloride (PVC) plant in India for maintenance in April 2021. The unit in Dahej with an annual capacity of 315,000 tons/year was taken offline by 5 April 2021 and will resume operations on 20 April.

According to MRC's ScanPlast report, Russia's overall PVC production reached 259,400 tonnes in the first three months of 2021, down 3% year on year. All producers decreased their output over the stated period.

Reliance Industries is one of the world's largest producers of polymers. The company produces polypropylene, polyethylene and polyvinyl chloride and other petrochemical products.

Trinseo raises prices for styrene butadiene, styrene acrylic and acrylic latex products sold in North America

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex, and rubber, has announced that effective May 15, 2021, the company is increasing the prices of all Styrene Butadiene, Styrene Acrylic, and Acrylic latex products sold into the carpet market in North America, as per the company's press release.

The increase will be USD0.06/dry lb (USD0.13/kg or USD133/tonne) for all indexed and non-indexed customers, as contracts allow.

According to the statement, the present increase is necessary to offset rising raw material and transportation costs and to remain a strong and reliable supplier.

As MRC reported earlier, Trinseo and its affiliate companies in Europe have announced a price increase for all polystyrene (PS), acrylonitrile-butadiene-styrene (ABS) and acrylonitrile-styrene copolymer (SAN) in Europe. Effective April 1, 2021, or as existing contract terms allow, the contract and spot prices for the products listed below rose as follows:

- STYRON general purpose polystyrene grades (GPPS) -- by EUR330 per metric ton;
- STYRON and STYRON A-Tech and STYRON X- Tech and STYRON C- Tech high impact polystyrene grades (HIPS) - by EUR330 per metric ton;
- MAGNUM ABS resins - by EUR300 per metric ton;
- TYRIL SAN resins - by EUR350 per metric ton.

According to ICIS-MRC Price report, prices of Russian PS grew significantly in April an broke the next historical records. All domestic producers announced an increase in PS prices last week. Such an abnormal price rise became critical for many small-sized converters.

Trinseo is a global materials company and manufacturer of plastics, latex and rubber. Trinseo's technology is used by customers in industries such as home appliances, automotive, building & construction, carpet, consumer electronics, consumer goods, electrical & lighting, medical, packaging, paper & paperboard, rubber goods and tires. Formerly known as Styron, Trinseo completed its renaming process in 1Q 2015. Trinseo had approximately USD3.0 billion in net sales in 2020, with 17 manufacturing sites around the world, and approximately 2,600 employees.

COVID-19 - News digest as of 30.04.2021

1. Shell raises its dividend in Q1 as profits surge

MOSCOW (MRC) -- Royal Dutch Shell's (RDSa.L) profits leapt to USD3.23 billion in the first three months of the year and the energy company raised its dividend as planned but warned that the outlook remained uncertain due to the coronavirus pandemic, said the company. Shell's adjusted earnings were above an average analyst forecast of USD3.125 billion and also ahead of earnings of USD2.9 billion last year, boosted by assets sales as well as higher oil and liquefied natural gas (LNG) prices. Sales of oil and gas assets in countries including Nigeria, Canada and Egypt added USD1.4 billion to first-quarter profits. Shell's London-listed shares were up 1.2% at 0736 GMT, outperforming a 1% gain for the broader European energy index (.SXEP).