Crude oil futures drop in Asia as market awaits US stocks data for fresh pricing cues

Crude oil futures drop in Asia as market awaits US stocks data for fresh pricing cues

MOSCOW (MRC) -- Crude oil futures were lower in mid-morning trade in Asia Oct. 13 as investors awaited the release of weekly US stocks data for fresh pricing cues, reported S&P Global.

At 10:30 am Singapore time (0230 GMT), the ICE December Brent futures contract was down 61 cents/b (0.73%) from the previous close at USD82.81/b, while the NYMEX November light sweet crude contract was 58 cents/b (0.72%) lower at USD80.06/b.

The pause in the recent sustained rally could prompt profit taking, but that may also prompt buying on the dips by market participants anticipating more upside to emerge in the coming week.

Investors are awaiting the release of weekly US stocks data by the American Petroleum Institute later Oct. 13 and more definitive numbers by the US Energy Information Administration the following day for fresh pricing cues.

Analysts polled Oct. 11 by S&P Global were expecting the data to show a 500,000-barrel draw in US crude stocks to 420.4 million barrels for the week ended Oct. 8, which would run counter to seasonal trends; US inventories typically build as refinery runs slow with the onset of shoulder season maintenance.

ANZ research analysts in a note said that crude oil prices have ebbed and flowed as investors debate the impact of energy shortages in Asia and Europe, but there were growing expectations that high prices for gas and thermal coal were likely to boost demand for alternatives such as diesel and fuel oil.

Supply outlooks also remain constrained by the high gas and coal prices that raise the prospect of more switching to oil for power generation.

ANZ analysts referenced TotalEnergies CEO Patrick Pouyanne as saying that demand for fuel oil was soaring in parts of Asia as buyers turn away from gas, and also the IMF cautioning that threats to growth have increased amid rising costs for food and fuel.

As MRC informed before, US commercial crude stocks fell 3.48 million barrels to 413.96 million barrels in the week ended Sept. 17, to more than 8% below the five-year average, Energy Information Administration data showed. Stocks were last lower Oct. 5, 2018.

We remind that 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 also 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.

OPEC+ deal remains key to stabilize oil market from consequences of COVID-19 - Putin

OPEC+ deal remains key to stabilize oil market from consequences of COVID-19 - Putin

MOSCOW (MRC) -- The alliance of OPEC and non-OPEC countries remains key to stabilizing the oil market which is still volatile from the consequences of COVID-19 and Russia expects the deal to last until the end of 2022, reported S&P Global with reference to President Vladimir Putin's statement Oct. 13.

Speaking at the Russian Energy Week in Moscow, he noted how the OPEC+ agreement on historic oil production cuts reached in April 2020 was crucial to ensuring stability during the pandemic and falling oil demand, as well as keep up investment activity.

"At that time, the OPEC+ agreement played a key role in stabilizing the oil market ... If investments in new fields and prospective oil production were stopped, the market would inevitably face a large-scale, critical deficit in the very near future. We are witnessing some of this today," Putin said.

Russia remains a responsible member of the alliance and expects the OPEC+ deal to last until the end of 2022, he said.

"As the global economy and oil demand are still recovering, our countries continue stabilize the market and prices, and timely increase oil production and supplies," Putin said.

Sharp jumps in oil prices seen in recent weeks remain negative for both producers and consumers, he said. Moreover, prices reaching USD100/b "is quite possible", Putin said.

S&P Global has assessed Dated Brent at three-year highs in recent days, with the benchmark reaching as high as USD84.43/b on Oct. 11.

"We often hear that high prices are beneficial for producers, allowing them to receive super-profits without making any visible efforts ... high prices have negative consequences for everyone, including producers. And our producers are well aware of this," Putin said.

Beyond 2022, Putin hopes to continue cooperation with OPEC+ countries on broader topics, including reduction of carbon footprint.

"Cooperation between our countries has every chance of further development. Mastering new environmentally friendly technologies, production and refining of hydrocarbons, exchange of practices, reduction of carbon footprint," he said.

Russia aims to become carbon neutral by 2060, Putin said.

As MRC informed earlier, Russia is expected to have 3.464 million tonnes of primary oil refining capacity offline in October, a weekly estimate based on Refinitiv Eikon data and Reuters calculations showed on Friday, up 9.1% from last week's estimate. That is still be lower than the previous month, with many plants expected to finish maintenance.

We remind that in August 2021, industrial production in the Russian Federation increased by 4.7% compared to August 2020, the Federal State Statistics Service (Rosstat) said in a statement.

We also remind that Russia's GDP in 2021 will grow to 4.2% instead of the projected 3.8%, said State Secretary and Deputy Minister of Economy Alexei Khersonsev in September 2021.

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.

SIBUR selects Nova Energies to develop carbon capture solutions for ZapSibNeftekhim

SIBUR selects Nova Energies to develop carbon capture solutions for ZapSibNeftekhim

MOSCOW (MRC) -- Nova Energies, a joint venture of Technip Energies and NIPIGAS, has been awarded a Pre-FEED contract by SIBUR, the largest petrochemical holding of Russia and Eastern Europe, to study potential Carbon Capture solutions for ZapSibNeftekhim (part of SIBUR), as per NIPIGAS's press release.

The scope of NOVA ENERGIES work includes technology and optimal technical solutions development, along with a cost estimate for the process of capturing, transporting and utilizing carbon dioxide (CO2) from the operating enterprises of ZapSibNeftekhim and the Tobolsk thermoelectric power station, which is the unique supplier of steam for the plant and the key supplier of heat for housing and social facilities of the region.

Dmitry Evstafiev, General Director of NIPIGAS, declared: “We are pleased to announce that NIPIGAS team in partnership with Technip Energies has begun the development of a project to reduce carbon emissions of the largest petrochemical enterprise in our country and the main production asset of SIBUR. This project gives Nova Energies an opportunity to contribute to the development and to take a leading position in the market for energy transition in our country from the very beginning of the operation of the joint venture.”

As MRC reported, ZapSibNeftekhim produced the 7 millionth ton of polyolefins, according to the company's statement earlier this month.

We remind that the first polymer production with a capacity of 500,000 tons of polypropylene (PP) per year began operations in Tobolsk on October 15, 2013, at the site of Tobolsk Petrochemical Plant (SIBUR-Tobolsk). In 2019, another production complex with a capacity of 1.5 million tons of polyethylene (PE) and 500,000 tons of PP per year was launched in Tobolsk, and in 2020, it reached its design capacity. In 2020, the legal merger of ZapSibNeftekhim with the petrochemical plants of SIBUR-Tobolsk, located at the same industrial site, was also completed. At present, the combined facilities of SIBUR in Tobolsk make it possible to produce 2.5 million tons of base polymers per year.

According to ICIS-MRC Price report, SIBUR Tobolsk will reduce its capacity utilisation in October due to problems with raw materials. But by November, the company intends to resolve the problem with the shortage of feedstocks for PP production. The annual production capacity is 500,000 tons.

SIBUR is the largest vertically integrated gas processing and petrochemical company in Russia, uniting a number of production sites in various regions of the Russian Federation. The company sells products to consumers in the fuel and energy complex, automotive, construction, consumer goods, chemical and other industries in more than 80 countries around the world.

Nova Energies is a full-fledged independent player on the Russian market which provides a wide range of expertise, including Engineering and Design, Project Documentation and CAPEX estimates ("FEED/PD") as well as Engineering, Procurement, Construction, Installation, and Commissioning (“EPC/EPCm”) for CO2 removal, Carbon Capture, clean H2 production, Bio Energies, Bio Refineries, Bio Chemistry, Ammonia, as well as other energy transition related themes.

Stavrolen shut PE production for turnaround

Stavrolen shut PE production for turnaround

MOSCOW (MRC) - Stavrolen, a major producer of polyolefins in Russia, has begun a sequential shutdown for high density polyethylene (HDPE) production, according to the ICIS-MRC Price Report.

According to the company's clients, Stavrolen began a sequential shutdown of HDPE capacities for scheduled preventive maintenance on 12 October. The outage will be quite long and will last for about 36 days. The plant's annual production capacity is 300,000 tonnes.

It is also worth noting that Stavrolen intends to stop polypropylene (PP) production from 22 October for scheduled repairs. The outage will last for 26 days. The plant's annual production capacity is 120,000 tonnes.

Stavrolen, Lukoil's subsidiary, is Russia's second largest high density polyethylene (HDPE) producer after Kazanorgsintez and the fifth largest PP manufacturer. Stavrolen's HDPE and PP production capacities are 300,000 tonnes and 120,000 tonnes per year, respectively, the plant also produces 80,000 tonnes of benzene and 50,000 tonnes of vinyl acetate per year.

PTTGC to conduct brief maintenance at its LDPE plant in Thailand

PTTGC to conduct brief maintenance at its LDPE plant in Thailand

MOSCOW (MRC) -- PTT Global Chemical (PTTGC) is in plans to undertake a brief shutdown for maintenance at its low density polyethylene (LDPE) plant in October, reported CommoPlast.

However, the exact dates of the turnaround were not given.

Located at Map Ta Phut in Thailand, the LDPE plant has a production capacity of 345,000 mt/year.

As MRC wrote before, PTTGC undertook a planned shutdown at its LDPE plant for turnaround on July 7, 2019. The plant remained shut for around 3 weeks.

And in 2020, the company shut this plant for repairs from September 24 to October 17.

PTT has a total capacity of 800,000 mt/year of high density polyethylene (HDPE), 345,000 mt/year of LDPE and 800,000 mt/year of linear low density polyethylene (LLDPE) at the same site.

The producer has yet to confirm maintenance schedules at its HDPE and LLDPE plants.

According to MRC's ScanPlast report, July estimated LDPE consumption in Russia grew to 52,280 tonnes from 45,190 tonnes a month earlier. Russian producers raised their PE output, imports also increased. Russia's estimated LDPE consumption was about 332,840 tonnes in the first seven months of 2021, up by only 1% year on year. PE production and exports decreased, whereas imports increased.

PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.