Oil prices to continue their bullish trend this year on recovery in global demand

Oil prices to continue their bullish trend this year on recovery in global demand

MOSCOW (MRC) -- Oil prices are set to remain on a bullish course this year given the strong recovery in global demand following the COVID-19 pandemic-induced slump, reported Reuters with reference to the head of the Petroleum Association of Japan (PAJ).

"Global crude demand is expected to further recover in the second half of this year, given the convergence of the pandemic and the revival of economic activity in the United States and Europe," PAJ president Tsutomu Sugimori told a news conference.

Middle East crude benchmark prices in Dubai are expected to remain in the USD70s per barrel for a while, he said.

The world will need a lot more oil from OPEC+ as global demand is on track to return to pre-pandemic levels at the end of next year, the International Energy Agency said last week, just a few weeks after saying long-term oil production must decline to reduce emissions.

Sugimori, who also serves as chairman of Japan's biggest refiner, Eneos Holdings Inc, said fuel demand in Japan was expected to pick up later this year.

Japan's gasoline demand in May rose 14% from the same month a year earlier but it was still down 12% from May 2019, he said, adding that the figure in June is expected to fall 5% from a year earlier and decline 9% from June 2019.

As MRC wrote previously, ENEOS restarted its Sendai refinery in northeast Japanon 18 May, 2021. This refinery was hit by an earthquake on 1 May, 2021. Besides, on 18 May, the company shut down its Sakai refinery in western Japan for maintenance.

We remind that ENEOS Corporation restarted its naphtha cracker in Kawasaki on 1 February 2021. The company shut this cracker with an annual capacity of 515,000 tons/year of ethylene, 300,000 tons/year of propylene, and 105,000 tons/year of butadiene on 4 December, 2020, for repairment after a technical issue reported at the butadiene separation unit and initially planned to resume operations on 28 December, 2020.

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.

Japan's largest refiner JXTG Nippon Oil & Energy was renamed ENEOS Corporation on 25 June, 2020, as part of a wider re-organization of the parent company JXTG Holdings. The move, which also involved renaming the parent company to ENEOS Holdings upon approval at its annual shareholders meeting in June 2020, comes as it strives to be a more comprehensive energy and materials company under its 2040 vision announced in May, 2019. JXTG Holdings was formed as a result of a merger between JX Holdings and TonenGeneral in April 2017. This followed the establishment of JX Holdings as a result of the merger between Nippon Oil and Nippon Mining Holdings in April 2010.
MRC

Crude oil futures down in Asia on dollar soaring despite bullish China, US stocks data

Crude oil futures down in Asia on dollar soaring despite bullish China, US stocks data

MOSCOW (MRC) -- Crude oil futures fell in mid-morning trade in Asia June 17 as a hawkish slant from the US Federal Reserve sent the US dollar soaring, but markets remained supported by bullish data from China's National Bureau of Statistics and the US Energy Information Administration, reported S&P Global.

At 10:17 am Singapore time (0217 GMT), the ICE August Brent futures contract was down 77 cents/b (1.04%) from the previous settle at USD73.62/b, while the NYMEX July light sweet crude contract was down 72 cents/b (1.00%) at USD71.43/b.

Market analysts attributed the downward trajectory in oil prices to a stronger US dollar, which IG market strategist Yeap Jun Rong said was fueled by hawkish signals from the latest Federal Reserve meeting concluded June 16.

"The Fed may have delivered a more hawkish message for markets than many would have expected, with Fed officials leaning towards two rate increases by the end of 2023 based on median estimates, he said in a June 17 note. "With the more hawkish tilt in the Fed's dot plot, the US dollar has broken out of its previous consolidation zone, jumping to its six-week high," he added.

At 10:17 am Singapore time, the ICE US Dollar Index was trading at 91.32, up 0.9% from its previous settle. Strength in the US dollar makes dollar-denominated assets like oil futures more expensive for investors holding foreign currencies, and hence dents the demand for such assets.

The fall in crude prices in early Asian trade came despite support from National Bureau of statistics data June 16 that showed China's crude throughput in May rose 4.4% year on year to a record high of 60.5 million mt.

May marked the first time China's monthly crude throughput has crossed 60 million mt, and analysts said throughput was expected to remain high until year end, when demand seasonally slows down as winter approaches and independent refineries run out of crude import quota.

Data from the EIA was also shoring up sentiment in the market, showing that US commercial crude stocks fell 7.35 million barrels in the week ended June 11 to a four-month low of 466.67 million barrels.

The strong refinery runs underpinning the draw also led to US gasoline inventories rising 1.95 million barrels to 242.98 million barrels in the week, leaving them above the five-year average for the first time since mid-February. US distillate inventories fell 1.02 million barrels over the same period to 136.19 million barrels, the data showed.

The EIA data echoed the market's expectation of strong downstream products demand in the US amid the country's rising vaccination rates and easing mobility restrictions.

We remind that 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

Ukrainian PE imports down by 8% in Jan-May 2021

MOSCOW (MRC) -- Overall polyethylene (PE) imports into the Ukrainian market reached 103,300 tonnes in the first five months of 2021, down by 8% year on year. Only high density polyethylene (HDPE) accounted for the decrease in imports, according to MRC's DataScope report.


Last month's PE imports to Ukraine were 19,800 tonnes versus 19,500 tonnes in April, local companies increased their purchases of linear low density polyethylene (LLDPE). Thus, overall PE imports reached 103,300 tonnes in January-May 2021, compared to 112,700 tonnes a year earlier. These were mainly HDPE imports that decreased, whereas imports of other PE grades increased.

The structure of PE imports by grades looked the following way over the stated period.


Last month's HDPE imports were 6,600 tonnes, which corresponded to the April figure. Overall HDPE imports into the country totalled 33,100 tonnes in the first five months of 2021 versus 46,600 tonnes a year earlier.

May low density polyethylene (LDPE) imports were 5,400 tonnes versus 5,800 tonnes a month earlier, Ukrainian companies reduced their purchases in Russia. Overall LDPE imports reached 31,600 tonnes in January-May 2021, which corresponded to the last year's figure.

Last month's LLDPE imports were 6,000 tonnes, compared to 5,700 tonnes in April, shipments of film grade LLDPE from Russia increased. However, overall LLDPE imports reached 31,700 tonnes in the first five months of 2021, compared to 29,300 tonnes a year earlier.

Imports of other PE grades, including ethylene-vinyl-acetate (EVA), totalled 6,900 tonnes over the stated period, compared to 5,400 tonnes a year earlier.

MRC

Epsilyte reduces June EPS prices on lower feedstock costs

MOSCOW (MRC) -- Epsilyte (The Woodlands, Texas), a leading North American producer of expandable polystyrene (EPS), has announced a reduction in its prices for all EPS grades for June shipments, said the company.

Thus, the price of the company's EPS grades dropped by 3 cents/pound (cts/lb) or USD66/tonne, effective 1 June, 2021 or as contracts permit.

The present adjustment reflects current EPS supply and demand dynamics as well as expected feedstock trends.

As MRC reported earlier, Epsilyte raised its May EPS prices in the region by 8 cts/lb or USD176/tonne.

EPS is a rigid form of polystyrene (PS) used in insulation foams for the construction industry as well as for packaging.

According to ICIS-MRC Price report, last week's prices of Russian EPS remained at the level as of early June. Prices of SIBUR-Khimprom's spot EPS quantities were at Rb167,000-175,000/tonne CPT Moscow, including VAT. Plastik, Uzlovaya shipped material at Rb178,000-180,000/tonne CPT Moscow, including VAT, depending on the grade.

Epsilyte is owned by private equity firm Balmoral Funds (Los Angeles, California). Epsilyte is one of North America’s leading producers of expandable polystyrene resin. The company is focused on solving customer needs for efficient, high-R value EPS. This includes reducing energy usage in buildings, ensuring safe and healthy food through innovative packaging technology, and participating in infrastructure investment both in the United States and abroad.
MRC

Uzbekneftegaz in talks with UOP on refinery modernisation

Uzbekneftegaz in talks with UOP on refinery modernisation

MOSCOW (MRC) -- Uzbekistan's state energy company, Uzbekneftegaz, and UOP Limited, a subsidiary of Honeywell International, are in talks about upgrading the Central Asian nation's Bukhara Oil refinery, reported Reuters with reference to the Uzbek government's statement.

The companies have discussed a project worth USD184 million which would involve financing from the United States' EXIM Bank, the authorities said.

As MRC informed earlier, in April 2021, Honeywell announced that Lotte GS Chemical Corp. will use Honeywell UOP Q-Max, Phenol 3G, and Evonik MSHP technologies to produce more than 565,000 metric tons per year of phenol and acetone at its petrochemicals facility in Yeosu, Korea. UOP is providing a license for the technology, in addition to basic engineering design services, key equipment, catalysts and adsorbents and technical services.

Along with phenol, acetone is largely used to produce bisphenol A (BPA), which, in its turn, is used in the production of plastics such as polycarbonate (PC) and epoxy resins.

According to MRC's ScanPlast report, Russia's estimated consumption of PC granules (excluding imports and exports to/from Belarus) totalled 34,000 tonnes in the first four months of 2021, up by 11% year on year (30,500 tonnes a year earlier).
MRC