US crude inventories continue falling as demand hits highest since March 2020

MOSCOW (MRC) -- Crude inventories last week dropped for a third straight week while fuel demand rose to its highest since March 2020, reported Reuters with reference to the Energy Information Administration's statement.

Crude inventories fell by 3 million barrels in the week to Aug. 20, slightly higher than analysts' expectations in a Reuters poll for a 2.7 million-barrel drop. At 432.6 million barrels, crude stocks were at their lowest since January 2020.

After 10 consecutive weekly drawdowns, stocks at the Cushing, Oklahoma, delivery hub for U.S. crude futures rose by 70,000 barrels last week, the EIA said.

"A tick higher in refinery runs and a tick lower in imports has yielded a third consecutive draw to crude inventories - dropping them to their lowest since late January 2020," said Matt Smith, director of commodity research at ClipperData. "The inventory draw came despite a tick lower in refining activity on the US Gulf Coast."

Refinery crude runs rose by 66,000 barrels per day and refinery utilization rates rose by 0.2 percentage point to 92.4% of total capacity.

Net US crude imports rose last week by 426,000 bpd, the EIA said.

US total product supplied, a proxy for fuel demand, rose last week to 21.8 million bpd, the highest since March 2020, the data showed.

Both crude and gasoline prices gained after the report. US. crude rose 8 cents, or 0.2%, to USD67.62 a barrel by 11:13 a.m. ET (1513 GMT), while Brent was up 48 cents, or 0.6% at USD71.53 a barrel. US gasoline futures were up 2.5%.

As MRC informed previously, crude oil stockpiles fell modestly in early August, while gasoline inventories dipped to their lowest level since November, according to the US Energy Information Administration. Crude inventories fell by 447,000 barrels in the week to Aug. 6 to 438.8 million barrels, compared with analysts' expectations in a Reuters poll for a 1.3 million-barrel drop. Overall crude inventories have been on the decline for several weeks due to increased demand.

We remind that US crude oil production is expected to fall by 160,000 barrels per day (bpd) in 2021 to 11.12 million bpd, the US Energy Information Administration (EIA) said in a monthly report, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC

MOSCOW (MRC) -- Indonesia's plans to raise the mandatory bio-content in its palm oil-based biodiesel to 40% may face further delays, after the high price of the vegetable oil has made the programme too costly, a senior government official told Reuters.

Indonesia, the world's largest palm oil producer and exporter, has a mandatory biodiesel programme with 30% palm oil content, known as B30, but intends to expand the use of the oil for energy to save on fuel imports. Authorities had planned to increase the mix to 40% in July this year, but the timetable for the B40 programme is now unclear.

"We don't have a timeline yet for B40, although from the technical side, we're ready," Dadan Kusdiana, a director general at the energy ministry, said in an interview. He said implementing B40 in 2022 will be "challenging". Indonesia funds its biodiesel programme with proceeds from palm export levies.

However, authorities have revised levy rules three times since last year as they sought to support the biodiesel programme after prices soared, but without hurting exports. Malaysian palm oil futures hit a record of 4,560 ringgit (USD1,089.35) a tonne on Aug. 12 and have been trading around 4,300 ringgit recently, about 60% higher than a year earlier.

Dadan said 45 trillion rupiah to 46 trillion rupiah (USD3.1 billion-USD3.2 billion) is needed this year to fund the difference between using regular diesel and the palm-based fatty acid methyl ester (FAME) for B30. If prices stayed constant, mixing 40% FAME would require around 60 trillion rupiah (USD4.16 billion), he said, while noting adopting B40 would likely boost palm oil prices by shrinking global supply, making the programme even more expensive.

"That is what we're considering, how capable are we in terms of the levies. We have to provide bigger financing, but it doesn't have to come from higher levies," Dadan said, without elaborating on alternatives. The Indonesian Palm Oil Association (GAPKI) had already said in January it expected B40 to be delayed beyond 2022.

On the technical side, Dadan said the water and monoglyceride contents in FAME must be reduced for B40 to work, requiring new investment by biodiesel producers. Although biodiesel promises lower emissions, the use of palm oil as a feedstock raises concern about deforestation in the clearance of land to grow it. The European Union is planning to phase it out as fuel for transport. (USD1 = 14,425.0000 rupiah) (USD1 = 4.1860 ringgit).

As per MRC, India's July crude oil imports slumped to their lowest in a year, tanker arrival data from industry sources showed, and are likely to rebound in August as refiners are expected to boost runs after maintenance of units. Crude imports in July fell 12.5% month-on-month to 3.4 million barrels per day (bpd), but rose 12.8% year-on-year, as refiners shut units for maintenance and cut crude imports anticipating lower fuel demand during the monsoon season. Government data released on Tuesday showed India's oil imports declined to about 15.02 million tonnes, about 3.5 million bpd.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
MRC

MOSCOW (MRC) -- FogHorn announced that Aramco, one of the world’s leading integrated energy and chemicals companies, has deployed edge-powered computer vision solutions built on the FogHorn Lightning Edge AI platform at multiple sites to enhance safety, provide proactive monitoring for equipment failure, and enable automation of drilling equipment and processes, said Hydrocarbonprocessing.

Aramco selected the FogHorn Lightning Edge AI Platform to build an efficient infrastructure for future automation, digitalization, and standardization projects across various facilities. Video cameras are powerful sensors that observe a multitude of processes and can be leveraged to improve operations, production, and worker safety by providing insights that other sensors and control data do not capture. However, edge computing is required to cost-effectively process and infer data from these types of high-bandwidth sensors, especially in remote areas where little to no connectivity is available, such as oil and gas facilities.

The FogHorn Lightning Edge AI platform addresses these challenges by embedding intelligence locally, at or near the source of streaming sensor, video and control data, providing unprecedented low latency for onsite image processing and analysis. While video cameras were previously used to acquire images and videos, edge computing makes it possible for them to be “conscious” and “intelligent”, and play a critical role in automation, digitalization and remote management of operations.

Nabil Al Nuaim, Aramco’s Chief Digital officer, said: “Technologies like these help us to reach a successful digital transformation for Aramco and the regions it operates in.” He added that “Aramco’s investments in this field aim to increase accessibility of new digital technologies and create awareness of the benefits these novel technologies can have in areas such as health, safety, security and the environment. A perfect example of this is how FogHorn’s software could help strengthen Aramco’s leadership in flare minimization."

“Camera-based edge analytics enables automation of remote energy facilities and support our IoT edge infrastructure. Edge analytics streamline operations and provide staff with mission critical information to make time-sensitive decisions,” said Mahdi Adel, CEO of Aramco Ventures. “The Lightning Edge AI Platform facilitates the integration of new sensors and collects, validates, and enriches sensor data to identify patterns and create models that predict and mitigate problems, leading to more efficient operations. Our FogHorn-powered solutions enable real-time responses and help optimize production and safety at our facilities."

Aramco utilized the Lightning Edge AI platform to develop and deploy effective camera-based monitoring solutions across multiple plant and rig locations to increase operational safety and efficiency, particularly in the following use cases.

As per MRC, Saudi Aramco is in advanced talks to acquire a roughly 20% stake in Reliance Industries Ltd's oil refining and chemicals business for about USD20 billion to USD25 billion in Aramco's shares. An agreement could be reached as soon as the coming weeks, according to the report, which cited people with knowledge of the matter. Aramco and Reliance declined to comment.

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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) -- Repsol has successfully completed the manufacture of the first batch of biojet produced from waste on the Spanish market at its Petronor Industrial Complex in Bilbao, as per the company's press release.

This is a significant milestone in the production of fuels with a low carbon footprint. It represents a move forward in the decarbonization of fuels for air transport, a segment where electrification is not currently viable.

The batch consists of 5,300 tons of fuel and meets strict product quality requirements and sustainability conditions in the production, logistics, and marketing chain. Its use will avoid the emission of 300 tons of CO2, the equivalent of 40 flights between Madrid and the northern Spanish city of Bilbao.

This is the third production of biojet carried out by Repsol in Spain. It follows the manufacture of two other batches at the company’s Puertollano and Tarragona refineries, in 2020 and early 2021, respectively, where biomass was used as raw material. In the recently manufactured batch, however, waste has been used as feedstock, thus integrating circular economy tools in the process. This improves waste management, transforming waste into high value-added products such as low carbon footprint fuels. This is another example of the transformation of Repsol's industrial complexes to become multi-energy hubs, capable of manufacturing products with a low, zero, or even a negative carbon footprint.

The promotion of this type of fuel comes in addition to the projects that Repsol has already deployed in energy efficiency, low-emission electricity generation, renewable hydrogen, circular economy, synthetic fuels, and CO2 capture, use and storage. It is one of the company's main strategic axes to achieve its goal of becoming a net zero emissions company by 2050.

As MRC reported earlier, in July 2021, Maire Tecnimont S.p.A. announced that its subsidiary Tecnimont S.p.A. was awarded a contract by Repsol for the realization of a polypropylene (PP) Unit and a linear low density polyethylene (LLDPE) unit on an EPC (Engineering Procurement and Construction) Lump Sum Turn-Key basis, as part of Repsol’s expansion of Sines Industrial Complex in Portugal. The project completion is expected by 2025.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Repsol is a global multi-energy company established in Spain and listed on the Spanish Stock Exchange for 25 years. Its products are distributed in nearly 100 countries to around 24 million customers. Repsol Industrial Complex in Sines is the largest chemical site in Portugal.
MRC

MOSCOW (MRC) -- Shell Catalysts & Technologies (SC&T) has successfully commercialized OparisNext, their latest generation catalyst, at Ningbo Zhongjin PetroChemical Co, Ltd. Ningbo Zhongjin is one of the leading paraxylene (PX) producers in China, said Hydrocarbonprocessing.

Over the past decades, the Oparis series has offered proven catalytic benefits for key PX producers, resulting in more efficient operations and significant financial benefits. With the latest patented zeolite innovation in the OparisNext catalyst, it serves as the bedrock of attaining high ethylbenzene conversion while achieving excellent PX-ate at high space velocity (refer to charts shown below). These performance indicators are crucial in maximizing margins and strengthening the competitive position of Ningbo Zhongjin PetroChemical in the PX industry.

"We are very glad to be the first user of OparisNext, very happy to see that all the performance data can meet the guarantees. The excellent EthyleneBenzene (EB) conversion, low C8 ring loss are helping Ningbo Zhongjin to maximize operating margin. We believe the new catalyst will help us be more competitive in the PX market in China," said Mr Li Libo, Operating Vice-President of Ningbo Zhongjin. Having total PX capacity of 1600 KTA, the EthyleneBenzene Reformer (EBR) unit has undergone a catalyst changeout to OparisNext and successfully commissioned in 2021 with stellar performance results exceeding guarantee requirements.

In addition to high-performance catalyst, SC&T also offers excellent dedicated technical support to its customers to maximize the long-term profitability of the site and thereby maintaining its stronghold market share in China. “We are pleased to see the successful commercialization of OparisNext in Ningbo Zhongjin. We are also very glad to see our market-leading EBR catalyst being the key to maximize their returns since 2005.” said Ms. Agnes Lim, Marketing Manager of Specialty Catalyst, SC&T.

As of mid-2021, SC&T maintains two-thirds of its EBR catalyst inventory in China and expected to grow given the successful commercialization of OparisNext catalyst.

As MRC wrote before, Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC