Crude oil futures rangebound in Asia on dampened market sentiment due to threat of coronavirus spread from India

MOSCOW (MRC) -- Crude oil futures were rangebound during mid-morning trade in Asia May 7 as the threat of mutant coronavirus strains from India dampened market sentiment, but a weaker US dollar provided tailwind to prices, reported S&P Global.

At 11:12 am in Singapore (0312 GMT), the ICE Brent July contract was up 27 cents/b (0.4%) from the May 6 settle at USD68.36/b, while the June NYMEX light sweet crude contract was up 29 cents/b (0.45%) at USD65/b.

The debilitating second wave of the pandemic in India continued to limit the market's upside. The country reported a record 412,431 new COVID-19 infections on May 5, with the death toll at another record high 3,980, latest data from John Hopkins university showed.

Investors are concerned that the protracted pandemic situation in India could yield more mutant strains of the virus, which could reverse the progress other countries have made in controlling the pandemic.

Already, the B.1.617, a double mutant variant from India, has spread to at least 17 countries, according to the World Health Organization, with authorities in India saying that the strain may have contributed to the country's particularly severe second wave. Experts have yet to conclusively determine if this new strain is more lethal or transmissible than the existing strains.

Japan, the world's fourth largest crude importer, has also continued to reel from the pandemic, with media reports saying that a state of emergency, currently in effect in the Tokyo, Osaka, Hyogo and Kyoto prefectures, is set to be extended until the end of May.

However, despite this gloom, oil prices received a boost from a weakening US dollar, with the June contract for ICE US dollar index trading at 90.865 at 11 am, down 0.469% from the previous settle. A weaker US dollar makes dollar-denominated assets such as oil more attractive for buyers holding foreign currency, and hence boost their demand.

As MRC informed earlier, 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 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 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.
MRC

MOSCOW (MRC) -- Hellenic Petroleum, Greece's biggest oil refiner, plans capital expenditure of between 3.5 billion 4 billion euros (USD9.03 billion) by 2025, about of half of which will be on clean energy projects, said Hydrocarbonprocessing.

Hellenic operates three oil refineries in Greece but has been boosting its renewable energy portfolio under Greece's plan to increase its share of green energy as part of a binding European Union target for a 55% cut in CO2 emissions by 2030.

"We have a plan at the order of 3.5 to 4 billion euros," Chief Executive Andreas Shiamishis said of the group's spending plans at an online briefing presenting the group's strategy for 2020-2025.

Shiamishis said half of that would go into traditional activities and the other half in projects that will help the group's transition to cleaner energy. Hellenic is also looking to change its corporate structure to improve governance and financing and reduce its carbon footprint.

"Our aim is to reach a 50% improvement (of our carbon footprint) by 2030," Shiamishis said. "To achieve that, we need to transform our business strategy."

As per MRC, Greece received five expressions of interest for a majority stake in its biggest oil refiner Hellenic Petroleum. Greece last month launched a tender to sell at least 50.1 percent of Hellenic in one of the biggest asset sales under Athens' three international bailouts since 2010.

We 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 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.
MRC

MOSCOW (MRC) -- The owners of the troubled Limetree Bay refinery in St. Croix, U.S. Virgin Islands have agreed to resume sulfur dioxide monitoring, days after the U.S. EPA notified the company that it was in violation of the Clean Air Act, reported Reuters.

Reuters exclusively reported that the sulfur dioxide monitors near the refinery were not operating in March.

Recent incidents at the refinery released sulfur dioxide that prompted local school closures after students and staff reported feeling sick and forced some residents to shelter in their homes. Even short-term exposures to elevated levels of sulfur dioxide can harm the human respiratory system and make breathing difficult, according to the EPA.

The 200,000-barrel-per-day Caribbean refinery restarted operations this year after idling for about a decade. The restart was delayed several times due to problems with refinery equipment. Since the facility reopened, nearby St. Croix residents have complained of breathing problems and headaches.

Limetree Bay said last Wednesday it was reinstating the five sulfur dioxide air monitors near the facility voluntarily, adding that it is not required to operate them under existing permits.

Last Monday, the company rebuffed the EPA's notice of violation, arguing that the sulfur dioxide requirement only pertained to the refinery's previous owner, Hovensa, because the plant no longer burns sulfur-containing residual fuel oil.

The EPA disagreed with the company, noting that operating without sulfur dioxide monitors was in violation of the refinery's permits and other regulations. The EPA said on Monday that it is encouraged by Limetree Bay’s decision to re-establish the sulfur dioxide monitors and that it is exploring how it can support or augment monitoring in the interim.

Agency staffers arrived on the island in early May to conduct a joint investigation into the refinery incidents with the US Virgin Islands Department of Planning and Natural Resources.

As MRC wrote earlier, in late March 2021, EPA said it had revoked an expansion permit for the Limetree Bay oil refinery in the US Virgin Islands, citing concerns that the area around the facility is overburdened with pollution. The decision allowed the plant to keep operating but blocked ongoing expansion work pending an EPA review to assess measures the facility needs to take to protect nearby residents.

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.
MRC

MOSCOW (MRC) -- Trinseo, a global materials company and manufacturer of plastics, latex binders and synthetic rubber, and its affiliate companies in Europe have announced a price increase for all polycarbonate (PC) grades in Europe, as per the company's press release as of May 4.

Effective Mayl 1, 2020, or as existing contract terms allow, the contract and spot PC prices for the products listed below increased as follows:

- CALIBRE PC resins - by EUR510 per metric ton.

As MRC informed earlier, Trinseo last raised its prices for all PC grades in Europe on April 1, 2021 by EUR400 per metric ton.

According to MRC's ScanPlast report, overall estimated consumption of PC granules in the Russian market totalled 25,000 tonnes in the first quarter of 2021 (excluding imports and exports to/from Belarus), compared to 22,700 tonnes a year earlier. Demand increased by 10%.

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 USD3.8 billion in net sales in 2019, with 17 manufacturing sites around the world, and approximately 2,700 employees.
MRC

MOSCOW (MRC) -- State-run oil producer Saudi Aramco beat analysts' forecasts with a 30% rise in first-quarter net profit, helped by strong oil prices, reported Reuters.

Earnings by global energy companies such as Exxon Mobil have climbed on the back of rising crude prices, which are up by about a third this year, as fuel demand recovers from the pandemic and as a global surplus of crude shrinks.

"Given the positive signs for energy demand in 2021, there are more reasons to be optimistic that better days are coming," Amin Nasser, chief executive of the world's top oil exporter, said in a statement.

"And while some headwinds still remain, we are well-positioned to meet the world's growing energy needs as economies start to recover," he said.

Net income rose to USD21.7 billion for the quarter to March 31 from USD16.7 billion a year earlier. Aramco was expected to post net profit of USD19.48 billion, according to an average of estimates by five analysts.

Aramco, which listed in 2019 with the sale of a 1.7% stake mainly to the Saudi public and regional institutions, said earnings were boosted by stronger crude prices and higher refining and chemicals margins, helping offset lower production.

Aramco, which reduced its output as part of that pact and as a result of Saudi Arabia's additional voluntary production cuts, said global demand for petroleum products was recovering from its lows in 2020 but remained below pre-pandemic levels.

As MRC informed earlier, in October 2019, McDermott International announced that it had been awarded a contract by Saudi Aramco and Total Raffinage Chimie (Total) for their joint venture (JV) Amiral steam cracker project at Jubail, Saudi Arabia. Amiral is a JV in which Aramco holds 62.5% and Total the rest. The plant, designed to produce 1.5 million metric tons/year (MMt/y) of ethylene, will be one of the world's largest mixed-feed crackers.

Aramco and Total launched their USD5-billion Amiral JV project in October 2018. The steam cracker will be fed with a mixture of 50% ethane and refinery off-gases. It will supply ethylene to a downstream 1 MMt/y polyethylene manufacturing complex and other petrochemical products. The project aims to fully exploit operational synergies with the adjacent refinery, owned by Satorp, another JV between Aramco and Total. Third-party investors, including Daelim and Ineos, will locate plants at the value park adjacent to Amiral with a combined investment of USD4 billion. A final investment decision is expected in 2021.

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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC