ADNOC to reduce crude oil supply to Asian term buyers by 15% in September

ADNOC to reduce crude oil supply to Asian term buyers by 15% in September

MOSCOW (MRC) -- Abu Dhabi National Oil Company (ADNOC) will reduce the volume of crude oil it supplies to Asian term buyers by 15% in September, reported Reuters with reference to six sources with direct knowledge of the matter.

The cut was much deeper compared with a reduction of 5% in term volume allocation for crude oil cargoes loading in August, three of the sources said. ADNOC did not provide a reason for the deeper cuts, the sources said.

ADNOC declined to comment on such issues.

The move came as a surprise for some market participants ahead of an upcoming OPEC+ meeting on July 1. It was not immediately clear why ADNOC was making a deeper supply cut for crude oil loading in September for its term contract customers.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is returning 2.1 million barrels per day (bpd) to the market from May through July as part of a plan to gradually unwind last year's record oil output curbs.

Sources told Reuters last Tuesday that OPEC+ was discussing a further easing of oil output cuts from August as oil prices rise on demand recovery, but no decision had been taken yet on the exact volume to bring back to the market.

As MRC informed earlier, in March 2021, the UAE's Abu Dhabi National Oil Co. signed an agreement with Malaysia's Petronas to explore collaboration in the oil and gas sector of Abu Dhabi and in the low-carbon energy industry in the first such partnership between the two national oil producers.

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

PE imports to Kazakhstan fall by 20% in Jan-Apr 2021

MOSCOW (MRC) -- Polyethylene (PE) imports into Kazakhstan decreased in the first four months of 2021 by 20% year on year to about 46,000 tonnes. At the same time, only high density polyethylene (HDPE) accounted for the reduction in shipments, said MRC analysts.


PE imports to Kazakhstan reached 12,800 tonnes in April 2021, compared to 13,600 tonnes a month earlier, local companies almost halved their PE purchasing in Russia. Overall PE imports totalled about 46,000 tonnes in January -April 2021, compared to 57,800 tonnes a year earlier. Purchasing of linear low density polyethylene (LLDPE) imports increased significantly, whereas HDPE imports decreased.

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


April HDPE imports dropped to 9,700 tonnes from 10,600 tonnes, Russian producers reduced their export sales of pipe grade PE to the local market. Overall HDPE imports totalled almost 34,500 tonnes in the first four months of 2021, down by 27% year on year.

April low density polyethylene (LDPE) imports fell to 1,600 tonnes from 2,600 tonnes a month earlier, a Russian producer restricted its shipments to the local market. Overall LDPE imports reached 6,900 tonnes over the stated period, which corresponded to the last year's figure.

Apri LLDPE imports reached 1,500 tonnes versus 400 tonnes a month earlier. Overall LLDPE imports exceeded 4,600 tonnes in January-April 2021, up by 21% year on year.

MRC

COVID-19 - News digest as of 28.06.2021

1. US refining capacity drops 4.5% on weak demand during COVID-19 pandemic

MOSCOW (MRC) -- US refining capacity last year fell 4.5% to 18.13 million barrels per day (bpd) from a record 18.98 million bpd a year earlier, the US government reported, reflecting weak demand for motor fuels during the COVID-19 pandemic, according to Reuters. It was the first annual decline since 2018, when capacity fell by 18,530 bpd and the largest since 2012, according to Energy Information Administration (EIA) data. That year capacity shrank 414,192 bpd following the Great Recession. US refiners last year suffered deep financial losses and closed five facilities as the pandemic slashed fuel sales. Average U.S. gasoline consumption fell 13% last year with gasoline and diesel prices hitting a four-year low, according to government figures.


MRC

Crude oil futures steady in Asia as market awaits OPEC+ meeting

Crude oil futures steady in Asia as market awaits OPEC+ meeting

MOSCOW (MRC) -- Crude oil futures were flat during the mid-morning trade in Asia June 28, as the market awaited the upcoming OPEC+ meeting later in the week for pricing cues, reported S&P Global.

At 10:18 am Singapore time (0218 GMT), the ICE August Brent futures contract inched slightly lower by 3 cents/b (0.04%) from the previous settle at USD76.15/b, while the NYMEX August light sweet crude contract dipped 3 cents/b (0.04%) at USD74.05/b.

All eyes are on the OPEC+'s July 1 meeting, during which the producer group is expected to provide guidance into its production plan for August, and possibly beyond. OPEC+ is currently holding crude production at 6.2 million b/d below October 2018 levels and intends to taper this output cut to 5.76 million b/d in July.

The coalition has met with several calls to raise production August onward to ensure adequate oil supply in the market, with Indian oil minister raising concerns over inflationary pressure from increasing oil prices in a virtual meeting with OPEC Secretary General Mohammed Barkindo on June 24. Others have made similar calls, saying that countries emerging from the shadow of lockdown restrictions need affordable energy prices to support their economic recovery.

Yet analysts expect the coalition to remain cautious when it comes to raising production, as a myriad of developments could still derail the recovery in the oil market. Analysts said that, when doing its calculus, the OPEC+ will also be taking into account the spread of the more transmissible Delta variant of the coronavirus, which has caused an uptick of infections in Israel, the UK, parts of the EU and Australia.

Additionally, the producer group will also be wary of a deal on the Joint Comprehensive plan of action, even though progress on that front remains elusive.

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

PetroRabigh has no plans to overhaul LLDPE plant

PetroRabigh has no plans to overhaul LLDPE plant

MOSCOW (MRC) -- Saudi Arabia’s Rabigh Refining and Petrochemical Co (PetroRabigh) has no overhaul schedule for its linear low density polyethylene (LLDPE) plant at the moment, according to CommoPlast with reference to market sources.

The company operates two lines at this plant: No. 1 line can produce 250,000 mt/year of LLDPE, whereas No. 2 line can manufacture 350,000 mt/year of material.

As MRC wrote previously, in early May, 2020, the company resumed operations at its No. 1 and 2 LLDPE units in Rabigh after maintenance, with began in early March, 2020.

Besides, the company has a 300,000 tons/year high density polyethylene (HDPE) unit and a 160,000 tons/year low density polyethylene (LDPE) unit at the same site.

According to MRC's ScanPlast report, April LLDPE shipments to the Russian market increased to 56,810 tonnes from 35,810 tonnes a year earlier. Local producers raised their PE output. LLDPE shipments to the market were 132,470 tonnes in January-April 2021, up by 4% year on year.

PetroRabigh, a joint venture between Saudi Aramco and Japan's Sumitomo Chemical, has an annual output capacity of 18 million tonnes of refined products and 2.4 million tonnes of petrochemicals. Thus, the complex currently has a cracker to produce 1.6-million t/y of ethylene, as well as downstream production of polyethylene, polypropylene, propylene oxide, ethylene glycol and butene-1.
MRC