MOSCOW (MRC) -- Crude oil futures were steady during mid-morning trade in Asia Aug. 6, as the spread of the delta variant of the coronavirus in key oil-consuming economies continued to limit the market's upside and as participants await the upcoming US nonfarm payrolls data to gauge the country's economic conditions, reported S&P Global.
At 11:32 am Singapore time (0332 GMT), the ICE October Brent futures contract was up 14 cents/b (0.2%) from the previous close at USD71.48/b, while the NYMEX September light sweet crude contract rose 12 cents/b (0.17%) at USD69.21/b.
The front month Brent and NYMEX light sweet crude markers had settled 1.29% and 1.38% higher on Aug. 5, rising in tandem with the broader financial markets on risk-on sentiment following the release of a positive weekly unemployment claims report from the US Labor Department.
The oil rally, however, fizzled during this morning's Asian trading session, as investors remained concerned over the economic fallout from the region's battle against the pandemic.
The market has been especially anxious over the situation in China, where previously successful efforts to contain the pandemic had been thwarted by the spread of the more transmissible delta variant of the coronavirus.
"Oil has been under pressure this week as moves to reinstate travel restrictions in China reflected the situation across Asia. At least 46 cities have advised against travelling, and authorities have suspended flights and stopped public transport," ANZ analysts said in an Aug. 6 note.
Nervousness over the surge in the delta-driven COVID-19 infection numbers in the west, including in the US and major European economies, has also put a cap on oil prices.
The market nevertheless remains optimistic that oil demand in the US, and in the west, will defy the rise in COVID-19 cases, as higher vaccination rates may preclude the need for lockdown measures.
We remind that 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 also 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 density 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.