U.S. crude stocks dropped sharply

U.S. crude stocks dropped sharply

MOSCOW (MRC) -- U.S. crude stocks dropped sharply while petroleum products supplied by refiners hit an all-time record despite the rise in coronavirus cases nationwide, the Energy Information Administration said, as per Hydrocarbonprocessing.

Crude inventories fell by 7.2 million barrels in the week to Aug. 27 to 425.4 million barrels, compared with analysts' expectations in a Reuters poll for a 3.1 million-barrel drop. Product supplied by refineries, a measure of demand, rose to 22.8 million barrels per day in the most recent week. That's a one-week record, and signals strength in consumption for diesel, gasoline and other fuels by consumers and exporters.

The four-week average rose to 21.4 million bpd, highest since September 2019. "Total products supplied increased a fair amount. That's surprising to me as we see product demand remaining robust despite some of the Delta variant concerns," said Tony Headrick, analyst at CHS Hedging.

Next week's figures are likely to be skewed by the drop in offshore output due to Hurricane Ida, which has also shut numerous refineries on the U.S. Gulf Coast. U.S. production rose to 11.5 million barrels per day, highest since May 2020, even though weekly output figures are volatile and analysts generally rely more on monthly data from EIA on production.

Refinery crude runs fell by 134,000 barrels per day in the last week, EIA said. Refinery utilization rates fell by 1.1 percentage points in the week as the summer driving season wanes and the less-active turnaround season approaches. Many refiners delayed maintenance last year due to a lack of workers related to COVID-19.

U.S. gasoline stocks rose by 1.3 million barrels in the week to 227.2 million barrels, the EIA said, compared with expectations for a 1.6-million-barrel drop. Distillate stockpiles, which include diesel and heating oil, fell by 1.7 million barrels, versus expectations for a 650,000-barrel drop. Net U.S. crude imports fell last week by 45,000 barrels per day, EIA said.

Oil prices remained lower on the day. U.S. crude fell 1.1%, or 81 cents, to USD67.69 a barrel as of 10:53 a.m. EDT (1453 GMT). Brent dropped 74 cents, or 1%, to USD70.90 a barrel.

As per MRC, oil fell on expectations for demand to fall after Hurricane Ida shuttered refiners on the US Gulf Coast, and as producing nations in OPEC+ geared up to meet on Wednesday with the United States calling for suppliers to pump more crude. Brent crude futures for October, due to expire on Tuesday, fell 39 cents, or 0.5%, to USD73.02 a barrel by 11:08 a.m. EDT (1508 GMT). US West Texas Intermediate (WTI) crude futures were down 43 cents, or 0.6%, at USD68.78.

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.

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

Federal Trade Commission seeks to deter unlawful mergers in US oil and gas industry

Federal Trade Commission seeks to deter unlawful  mergers in US oil and gas industry

MOSCOW (MRC) -- The Federal Trade Commission will seek to deter "unlawful" mergers in the oil and gas industry and crack down on practices that may be harming consumers at the gasoline pump, FTC Chair Lina Khan told the White House in a letter, reported Reuters.

The letter, obtained by Reuters, was addressed to White House economic adviser Brian Deese and promised to start an investigation of abuses in the "franchise market" for retail fuel stations, among other steps.

Khan told Deese she was concerned that the FTC's approach to merger reviews in recent years had "enabled" significant consolidation in the industry and created "conditions ripe for price coordination and other collusive practices."

To tackle the issue, she said the FTC would "identify additional legal theories" to challenge mergers in which dominant players in the industry were buying up family-run businesses. She said the commission would also study its policies that require divestitures during mergers of fuel stations in overlapping markets to ensure that that was not encouraging further consolidation and anticompetitive behavior.

Lastly, she said the commission would probe practices related to fuel stations that are franchised.

As MRC informed previously, in May 2021, Chevron Corp. and Noble Midstream Partners LP announced that the companies had completed the previously announced acquisition, which resulted in Noble Midstream becoming an indirect, wholly-owned subsidiary of Chevron.

We remind that Chevron Phillips Chemical (CP Chem) halted production at its cracker in Sweeny (Old Ocean, TX, USA) on February 15, 2021, due to cold weather. Extreme cold and instability of power supply and fuel gas supply systems led to shutdowns of existing crackers No. 22, 24 and 33 and the production of polyethylene (PE). The company's total production capacity in Sweeney is 1.975 million tonnes per year of ethylene, 165,000 tonnes of propylene, 500,000 tonnes of high densty polyethylene (HDPE) and 500,000 tonnes of linear low density polyethylene (LLDPE).

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.
mrcplast.com

U.S. EPA asked U.S. Court to allow some refineries to blend biofuels

U.S. EPA asked U.S. Court to allow some refineries to blend biofuels

MOSCOW (MRC) -- The U.S. Environmental Protection Agency has asked a U.S. appeals court to allow the agency to reconsider some waivers it gave under the previous administration to oil refiners that exempted them from biofuel blending mandates, said Hydrocarbonprocessing.

The EPA asked the United States Court of Appeals for the District of Columbia Circuit for a voluntary remand of a decision the agency made in 2019 that granted 31 small refinery exemptions, known as SREs, and denied five. The remand would allow the agency to reconsider the waivers in light of court decisions that have discussed the use of SREs, the filing said.

It would also allow the agency to provide a more robust explanation of its action after reconsideration, according to the filing, dated Aug. 25. The EPA has reviewed arguments from some groups that claimed the agency under former President Donald Trump did not provide a reasoned explanation for granting the waivers.

"While EPA does not confess error, EPA acknowledges that a more robust analysis and explanation of its rationale for any action taken on remand would make any judicial review more efficient," the filing said. The EPA's request would allow the agency to reconsider the decision, but the motion would not vacate the waivers.

Under U.S. law, refiners must blend billions of gallons of biofuels into the nation's fuel mix, or buy tradable credits from those that do. Refiners can apply for an exemption if they can prove the obligations would financially harm them. Small refiners say the exemptions are necessary to keep them afloat, while the biofuels industry says the waivers hurt demand for their products. The oil industry refutes that claim.

"While RFA (the Renewable Fuels Association) supports EPA's reevaluation of these lawless exemptions, we object to EPA's remand request because it is unaccompanied by vacatur or some kind of limitations on its review," said RFA President Geoff Cooper.

As per MRC, the US Environmental Protection Agency (EPA) issued emergency fuel waivers for Louisiana and Mississippi, effective immediately, due to Hurricane Ida. Ida, one of the most powerful hurricanes ever to hit the US Gulf Coast, knocked out power to over 1 million homes in Louisiana on Monday and prompted rescue operations in flooded communities around New Orleans.

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

Formosa expands cumene and phenol plant in China using Lummus technology license and engineering design

Formosa expands cumene and phenol plant in China using Lummus technology license and engineering design

MOSCOW (MRC) -- Lummus Technology has achieved successful plant acceptance from Formosa Chemicals and Fibre Corp. for the company's cumene and phenol plant expansion in Ningbo, China, according to Hydrocarbonprocessing.

The expansion was to an existing 450 kMTA cumene and 300 kMTA phenol plant, which now has a 600 kMTA cumene and 400 kMTA phenol capacity.

"We are proud that this plant has successfully demonstrated reliable operation since its first start-up," said Leon de Bruyn, President and Chief Executive Officer of Lummus Technology. "Formosa's acceptance is another milestone in our long and close relationship that spans multiple decades. During this time, Lummus has provided world-class technology solutions to Formosa and helped them achieve reliability, optimization and superior performance at their facilities, while also lowering their carbon footprint."

The original plant was licensed in 2010 by Lummus. In 2017 Lummus was selected again by Formosa to provide the technology license and engineering design of the cumene and phenol plant expansion.

Versalis/Lummus' cumene and phenol technologies are best-in-class process technologies that leverage the design, operating and research experience of both organizations.

Phenol produced using the Versalis/Lummus process has the lowest carbon footprint due to lower overall energy consumption among available phenol technologies. The phenol process is an intrinsically safe and highly reliable wet-oxidation process. It utilizes advanced technology features, which not only maximize the phenol/acetone product yields and produce a very high purity phenol/acetone products but also results in the lowest cost of production per MT of phenol.

As MRC wrote before, in July 2021, Lummus Technology and Chevron Lummus Global LLC (CLG) announced multiple technology contracts from North Huajin Refining and Petrochemical Co., Ltd. for a grassroots refinery and petrochemical complex in Liaoning Province, China. The complex will include one of the largest vacuum residue desulfurization (VRDS) units in China and one of the largest Novolen polypropylene (PP) plants. Lummus will provide the license and basic engineering for its Novolen PP technology, plus the associated catalysts. CLG will provide the license and basic engineering for the VRDS technology, plus proprietary reactor internals and catalysts.

Phenol is largely used to produce bisphenol A (BPA), which, in its turn, is used in the production of plastics such as polycarbonate (PC) and epoxy resins.

According to MRC's ScanPlast report, Russia's overall estimated consumption of PC granules totalled 50,300 tonnes in the first half of 2021 (excluding imports and exports to/from Belarus), compared to 47,300 tonnes a year earlier. Demand increased by 6%.

Formosa Petrochemical is involved primarily in the business of refining crude oil, selling refined petroleum products and producing and selling olefins (including ethylene, propylene, butadiene and BTX) from its naphtha cracking operations. Formosa Petrochemical is also the largest olefins producer in Taiwan and its olefins products are mostly sold to companies within the Formosa Group. Among the company's chemical products are paraxylene (PX), phenyl ethylene, acetone and pure terephthalic acid (PTA). The company"s plastic products include acrylonitrile butadiene styrene (ABS) resins, polystyrene (PS), polypropylene (PP) and panlite (PC).
MRC

Sinopec posts USD6 bln H1 profit on rebounding oil prices, better demand

Sinopec posts USD6 bln H1 profit on rebounding oil prices, better demand

MOSCOW (MRC) -- China Petroleum & Chemical Corp reported a 39.15 billion yuan (USD6.05 bn) net profit for the first six months of 2021 on the back of renewed fuel demand and a rebound in oil prices amid a recovery from the impact of COVID-19, said Reuters.

Asia's biggest oil refiner, known as Sinopec, posted a 23 billion yuan loss during January-June last year as the coronavirus pandemic walloped fuel demand and knocked oil prices. The 2021 interim profit compares with a 31.338 billion yuan profit in the same period in 2019.

Revenue in the first six months rose 22.1% from last year's low base to 1.26 trillion yuan, following a recovery in global oil prices and robust demand for fuel and petrochemical products.

During the period, Sinopec processed a total of 126.11 million tonnes crude oil, up 13.7% on a year earlier, with gasoline output increasing by 20.8% as more people drove as China recovered from the COVID-19 shock.

As per MRC, Sinopec, the world's petrochemical major, has launched the first phase of the Gulei refining complex in Zhangzhou city in China’s southeastern Fujian province. The refining complex, a 50:50 joint venture between Sinopec’s Fujian Petrochemical Company Ltd and Taiwan Xuteng Investment Company Ltd, invested 27.8 billion yuan (USD4.28 billion) in the first phase.

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.

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group's key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.
MRC