MOSCOW (MRC) -- Crude oil futures hit fresh multiyear highs during midmorning Asia trade June 9 as the US Energy Information Administration forecast a decline in global oil inventories in the second half of 2021 in its June Short-Term Energy Outlook, reported S&P Global.
The rally was further supported by signs that the US-Iran talks, which could bring sanctioned Iranian barrels back into the market, would take longer than expected.
At 11:12 am Singapore time (0312 GMT), the ICE August Brent futures contract was up 50 cents/b (0.69%) from the previous settle at USD72.72/b while the NYMEX July light sweet crude contract was up 47 cents/b (0.67%) at USD70.52/b.
Both contracts touched multiyear highs June 4 before settling lower. The ICE Brent contract last settled higher at USD71.97/b on May 20, 2019, while the NYMEX light sweet crude contract was last higher at USD69.49/b on July 19, 2018, S&P Global Platts data showed.
Prices regained their upward momentum as EIA's STEO, released June 8, reinforced expectations of a demand-led recovery in the oil markets that would result in a drawdown of global oil inventories.
Global oil production is expected to match the rising levels of global oil consumption, with oil production increasing largely as a result of easing OPEC+ production cuts, according to the STEO.
"We expect rising production will end the persistent global oil inventory draws that have occurred for much of the past year and lead to relatively balanced global oil markets in the second half of 2021," the EIA said in the report.
Furthermore adding to the bullish sentiment, the American Petroleum Institute reported an estimated 2.1 million-barrel draw in US crude oil inventories in the week ended June 4.
On the supply side, US-Iran negotiations to potentially lift sanctions on Iranian crude seemed unlikely to wrap up soon. This was also keeping the sentiment supported in the oil markets.
"It seems talks could drag on much longer which means the timeline for additional output from Iran keeps getting pushed back," said Edward Moya, senior market analyst at OANDA, in a June 9 note.
Meanwhile, the market continues to await OPEC's and the International Energy Agency's June Oil Market Reports, due to be released June 10 and June 11, respectively, to get a better sense of supply and demand fundamentals going forward.
As MRC informed earlier, Indian refiners, anticipating a lifting of US sanctions, plan to make space for the resumption of Iranian imports by reducing spot crude oil purchases in the second half of the year. The world"s third-largest oil consumer and importer halted imports from Tehran in 2019 after former US President Donald Trump withdrew from a 2015 accord and re-imposed sanctions on the OPEC producer over its disputed nuclear programme.
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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC