MOSCOW (MRC) -- Crude oil futures fell in mid-morning trade in Asia Aug. 2 amid concerns over the resurgent spread of COVID-19, after the weekend brought a slew of reports of rising cases in China and parts of Southeast Asia, reported S&P Global.
At 10:55 am Singapore time (0255 GMT), the ICE October Brent futures contract was down USD1.08/b (1.43%) from the previous close at USD74.33/b, while the NYMEX September light sweet crude contract was 96 cents/b (1.30%) lower at USD72.99/b.
China on Aug. 1 reported 75 new COVID-19 cases, up from 55 the day before and the country's highest daily total in months. Authorities are now scrambling to contain outbreaks of the delta variant in several tourism-heavy cities, including Hainan Island and Zhangjiajie in Hunan province.
More than 1 million people have been placed under lockdown in Zhangjiajie, according to news reports.
"The weekend brought more discouraging headlines over the spread of the delta variant," said Vandana Hari of Vanda Insights.
"Especially worrisome for oil markets is the resurgence in China. It is the second largest oil consumer in the world and for many months, it has managed to keep COVID-19 in check until now," Hari added.
Lockdowns were also announced or extended in other parts of Asia, including Australia, Thailand and the Philippines.
The recent outbreaks will dampen hopes by investors that the global vaccination drive will keep the COVID-19 situation in check, analysts said.
"Clearly, COVID-19 still poses a risk to the demand recovery, particularly in countries where vaccination rates are still low," ING analysts Warren Patterson and Wenyu Yao said in a note.
As MRC informed earlier, Saudi Arabia, the world's top crude oil exporter, will supply full contractual volumes of August-loading crude to at least five Asian customers. However, Saudi Aramco has turned down two of the buyers' requests for extra barrels.
We remind that Mukesh Ambani, chairman and managing director of Reliance Industries Ltd (RIL), said in June he expects the company's deal with Saudi Aramco to materialise this year. Meanwhile, Yasir Al-Rumayyan, chairman of Saudi Aramco and the Governor of the Public Investment Fund, joined the board of Reliance as an independent director.
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 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.