MOSCOW (MRC) -- Crude oil prices settled lower Aug. 3 as the continued spread of COVID-19 stoked concerns of demand-destroying mobility restrictions in Asia, reported S&P Global.
NYMEX September WTI settled down 70 cents at USD70.56/b and ICE October Brent declined 48 cents to USD72.41/b.
The rapid spread of delta variant of the coronavirus in Asia has stoked concerns that governments in the region could act quickly to institute new mobility restrictions. The Chinese government in July instituted mandatory quarantines at major ports, causing shipping backlogs and dislocations in the marine fuel oil market.
Market participants were preparing for a similar slate of measures in response to this latest outbreak. Airlines have canceled flights on certain routes, and mobility restrictions have been introduced in cities like Beijing.
NYMEX September RBOB settled down 39 points at USD2.2708/gal and September ULSD declined 94 points to USD2.1264/gal.
"While there remains plenty of cause for optimism - and I'm sure that will dominate more in the months ahead -- there's seemingly more focus on the delta spread, especially in China, the patches of softness appearing in the data and the risk of the Fed tapering too soon," OANDA senior market analyst Craig Erlam said in a note. "The manufacturing PMIs seem to have been the catalyst for the uncertainty this week, with both China and the US producing worse than expected prints."
The PMI data "feed into the narrative of peak growth and with the China data coming at a time of rising COVID cases, potentially darker days ahead," Erlam added. Data released Aug. 1 showed that China's Purchasing Manager's Index fell from 50.9 in June to 50.4 in July, as its economy struggles with extreme weather and a resurgence in COVID-19 infections.
Meanwhile, data from the Institute of Supply Management showed a slowdown in US manufacturing activity, with national factory activity falling from 60.6 in June to 59.5 in July, its lowest since January.
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.