Crude oil futures drop on higher inventories and stronger dollar

MOSCOW (MRC) -- Crude oil futures were lower mid-morning Sept. 30 as investors adopt a wait-and-see approach ahead of OPEC+ meeting, while a stronger dollar and the increase of US crude stocks added further headwinds to energy prices, reported S&P Global.

At 10:30 am Singapore time (0230 GMT), the ICE November Brent futures contract was down 24 cents/b (0.31%) from the previous close at USD78.40/b, while the NYMEX November light sweet crude contract was 5 cents/b (0.05%) lower at USD74.78/b.

"The rally in oil prices continue to take a pause, with investors largely digesting the US dollar strength and unexpected increase in crude inventories," IG Market Strategist Yeap Jun Rong told S&P Global on Sept 30, adding that the recent oil price rally may also carry a more cautious tone ahead, as investors adopt a wait-and-see approach going into the OPEC+ meeting next week.

According to the US Energy Information Administration data showed late Sept. 29, total US commercial crude oil stocks climbed 4.6 million barrels to 418.54 million barrels in the week to Sept. 24. U.S. crude oil inventories are about 7% below the five year average for this time of year. Total motor gasoline inventories increased by 200,000 barrels on the week, while distillate fuel inventories increased by 400,000 barrels. The build was largely in line with recent expectations, with recent American Petroleum Institute data showing stockpiles were up 4.1 million barrels in the week.

"US oil output reached 11.1 million b/d after slumping to 10 million b/d early this month due to Hurricane Ida, while refineries are restoring production," said ANZ research analysts in a note on Sept. 30, adding that recovering US oil production has helped to build inventories.

Nevertheless, a tight market for oil is still remain to be seen amid the supply constraint with the growing demand. Meanwhile, a stronger US dollar has added further pressure to crude prices. The US dollar index was seen at 94.29 in midmorning trading and on pace to close at a one-year high.

As MRC informed earlier in late August, 2021, US 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. 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.

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) -- China Petroleum and Chemical Corp, also known as Sinopec - the world's largest refiner by volume, has recently started construction of the largest hydrogen supply center for hydrogen fuel cells in Guangdong, according to ChinaDaily with reference to its operator.

The project will help the hydrogen sector in Guangdong rapidly develop and lift the region's hydrogen production and supply capacity.

With total investment of 62.44 million yuan (USD9.66 million), the project will adopt Sinopec's independent intellectual property rights technology and is expected to be put into operation by the first quarter next year, it said.

The company plans to invest 30 billion yuan during the 14th Five-Year Plan (2021-2025) period in hydrogen-related business, including hydrogen refueling stations and hydrogen storage facilities construction, all of which is believed to achieve carbon dioxide reduction of more than 10 million tons.

The company also plans to build 1,000 hydrogen refueling stations, 5,000 charging and battery swap stations and 7,000 distributed photovoltaic power generation sites during the 14th Five-Year Plan period. It has already built 21 hydrogen refueling stations in 14 provinces and cities, including Guangdong, Shanghai and Hainan.

As MRC reported before, in August, 2021, Sinopec, the world's petrochemical major, 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. That will result in an 800,000 tonnes per annum ethylene plant, a 600,000 tonnes per annum styrene unit and seven other downstream petrochemical units, Sinopec said.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas 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

MOSCOW (MRC) -- LyondellBasell has announced that Jinneng Chemical (Qingdao) Co., Ltd. has again selected LyondellBasell’s leading polypropylene (PP) technology for a new world scale production facility, as per LyondellBasell's press release.

The facility will include a 450 kiloton per annum (KTA) PP plant using LyondellBasell’s Spherizone technology as well as a 450 KTA PP plant using LyondellBasell’s Spheripol technology. The facility will be built in Qingdao City, Shandong Province, Peoples Republic of China.

“Jinneng Chemical’s choice to again use LyondellBasell’s PP technology for their Qingdao City facility, will enable them to produce a full range of PP products to serve an increasingly demanding Chinese polymer market” said Neil Nadalin, Director of Licensing at LyondellBasell. Nadalin added, ”Product differentiation is of increasing importance; and in selecting the Spherizone technology, our licensees are best prepared to take on that challenge. Additionally, we are very pleased that Jinneng Chemical has again chosen the easy-to-operate Spheripol process, as their phase 1 Spheripol process line approaches start-up”.

The Spherizone multi-zone circulating reactor (MZCR) provides a unique and innovative platform to manufacture PP products with novel architecture and enhanced product properties. With this contract, now more than 25 plants operating Spherizone process technology have been licensed worldwide.

Spheripol is the leading PP process with more than 30 million tons of licensed capacity. The latest fifth generation Spheripol technology includes process improvements that further maximize operational efficiency.

Both plants will commence operations using LyondellBasell’s Avant ZN catalyst.

As MRC reported earlier, in July 2021, LyondellBasell announced it had been selected by Jiangsu Fenghai High-tech Materials Co. to supply the technologies for a polyolefin project to be built in Lianyungang, Jiangsu, China. The new facility will include the production of 400,000-t/y PP, based on LyondellBasell?s Spheripol technology, and 300,000 t/y of high density polyethylene (HDPE) using its Hostalen ACP process.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

LyondellBasell is one of the largest plastics, chemicals and refining companies in the world. Driven by its 13,000 employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, and improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road. LyondellBasell sells products into approximately 100 countries and is the world's largest licensor of polyolefin technologies.
MRC

MOSCOW (MRC) -- Solvay, a science company delivering high performance materials for safe and reliable food packaging, has conducted a proof of concept showing that polyvinylidene chloride (PVDC) has the potential to be recycled. PVDC is used in food, beverage and healthcare multilayer barrier packaging across the world, said the company.

The proof of concept involves a process to recycle Ixan PVDC bioriented film from a post-industrial waste source from food packaging without compromising the performance of the high barrier polymer. It marks an important step towards more sustainable and circular packaging applications, with the potential to launch other initiatives like recycling post-consumer packaging containing PVDC.

"The proof of concept developed by our research team is a solution for PVDC packaging circularity. It shows there is a possibility to reintegrate the recycled polymer into future applications, meaning it can be re-used and re-blended with virgin materials – without losing or degrading its high barrier properties. It goes without saying that setting a global PVDC recycling stream is a huge task, so we are therefore inviting our fellow companies to work alongside us to introduce a way to recycle PVDC across the globe. We all have a role to play in the plastic packaging recycling challenge, and Solvay is committed to playing its part."

“The recycling technology developed by our team enables us to achieve the right quality so that the recycled PVDC meets the strict requirements for indirect food contact, creating the closed loop,” adds Yves Vanderveken, Senior Project Portfolio Leader R&I.

Maintaining the high quality of the polymer was essential to Solvay in their quest to find a sustainable solution. Solvay specialty polymer’s function of providing a strong barrier against water, oxygen and aromas is why it is used in essential applications to preserve food and reduce waste. A reduction of these properties would defeat its purpose.

Now that this initial breakthrough has been achieved, Solvay is urging fellow companies operating within the plastics industry to work together to turn the recycling of PVDC into reality. There is a particular need to introduce the infrastructure required to collect and segregate packaging containing PVDC.

"It goes without saying that setting a global PVDC recycling stream is a huge task, so we are therefore inviting our fellow companies to work alongside us to introduce a way to recycle PVDC across the globe. We all have a role to play in the plastic packaging recycling challenge, and Solvay is committed to playing its part," adds Claire Guerrero.

The results of this proof of concept are opening new possibilities to test the recyclability concept on other packaging applications using PVDC.

We remind that BASF-YPC, a 50-50 joint venture of BASF and Sinopec, undertook a planned shutdown at its naphtha cracker on 30 April 2020. The company initially planned to start turnaround at the cracker on April 5, 2020. The plant remained under maintenance unitl 18 June, 2020. Located in Jiangsu, China, the cracker has an ethylene capacity of 750,000 mt/year and propylene capacity of 400,000 mt/year.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

Solvay is a science company whose technologies bring benefits to many aspects of daily life. With more than 24,100 employees in 64 countries, Solvay bonds people, ideas and elements to reinvent progress. The Group seeks to create sustainable shared value for all, notably through its Solvay One Planet plan crafted around three pillars: protecting the climate, preserving resources and fostering better life. The Group’s innovative solutions contribute to safer, cleaner, and more sustainable products found in homes, food and consumer goods, planes, cars, batteries, smart devices, health care applications, water and air purification systems. Founded in 1863, Solvay today ranks among the world’s top three companies for the vast majority of its activities and delivered net sales of EUR10.2 billion in 2019. Solvay is listed on Euronext Brussels (SOLB) and Paris and in the United States, where its shares (SOLVY) are traded through a Level I ADR program.
MRC

MOSCOW (MRC) -- TotalEnergies said that it expected a big rise in renewable-based electricity, solar and wind forms of energy, partly due to a general increase in electrification in the industrial and business world, reported Reuters.

TotalEnergies added it expected that oil in general would plateau before 2030, while natural gas would continue to play a role as a transition fuel.

Producers and traders had said at an industry conference on Monday that global oil demand was expected to reach pre-pandemic levels by early next year as the economy recovers, although spare refining capacity could weigh on the outlook.

As MRC wrote previously, the gasoline-producing fluidic catalytic cracker (FCC) is expected to remain shut until the end of September at TotalEnergies SE’s 225,500-barrel-per-day (bpd) Port Arthur, Texas, refinery.

We remind that in November 2019, Total disclosed that it is evaluating construction of a new gas cracker at its Deasan, South Korea, joint venture (JV) with Hanwha Chemical.

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 1,396,960 tonnes in January-July 2021, up by 7% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 841,990 tonnes in the first seven months of 2021, up by 29% year on year. Supply of propylene homopolymers (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of statistical copolymers of propylene (PP random copolymers) subsided.

TotalEnergies is a broad energy company that produces and markets energies on a global scale: oil and biofuels, natural gas and green gases, renewables, and electricity. The company rebranded itself from Total to TotalEnergies during Q2 2021. The French firm has announced allocating part of surplus revenues to share buybacks. Its 105,000 employees are committed to energy that is ever more affordable, clean, reliable and accessible to as many people as possible. Active in more than 130 countries, TotalEnergies puts sustainable development in all its dimensions at the heart of its projects and operations to contribute to the well-being of people.
MRC