Crude oil futures mixed in Asia after overnight rise

Crude oil futures mixed in Asia after overnight rise

MOSCOW (MRC) -- Crude oil futures were mixed during mid-morning trade in Asia Oct. 21, following a rally overnight, but sentiment remained firm after an unexpected US inventory draw raised hopes of demand recovery, reported S&P Global.

At 10:39 am Singapore time (0239 GMT), the ICE December Brent futures contract was down 6 cents/b (0.07%) from the previous close at USD84.49/b, while the NYMEX November light sweet crude contract rose 13 cents/b (0.16%) at USD83.55/b.

"Crude prices rallied after US stockpiles unexpectedly declined and as gasoline demand strengthened despite the high prices at the pump," said OANDA's Senior Market Strategist Edward Moya, adding that the oil market deficit is not going away anytime soon as gasoline and distillate demand remains healthy, while jet fuel demand should pick up next month as international roars back.

Total commercial crude stocks fell 430,000 barrels in the week ended Oct. 15 to 426.54 million barrels, US Energy Information Administration data showed Oct. 20, putting them around 6% behind the five-year average for this time of the year. Total motor gasoline inventories decreased by 5.4 million barrels on the week, while distillate fuel inventories decreased by 3.9 million barrels on the week.

The bulk of the crude draw was realized at the NYMEX delivery point of Cushing, Oklahoma, where stocks dropped 2.32 million barrels to 31.23 million barrels. The draw was the largest one-week inventory slide at Cushing since February, leaving inventories nearly 40% behind the five-year average and at the lowest since October 2019.

Sharing similar sentiment, ANZ research analysts pointed out in an Oct. 21 note that demand for gasoline was also strong, with a 5.37 million barrel withdrawal pushing inventories to their lowest level since November 2019.

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.

Rosneft implementing a USD750 million refinery development program in India

Rosneft implementing a USD750 million refinery development program in India

MOSCOW (MRC) -- The Indian company Nayara Energy, 49.13% of which is owned by Russia's largest state oil company - Rosneft, has launched a USD750 million petrochemical development program, reported Vedomosti, citing a statement from Rosneft Chief Executive Officer Igor Sechin during the meeting of the Prime Minister of India Narendra Modi with the heads of the world oil and gas companies.

“We are confident in the long-term potential of the Indian market and therefore acquired a stake in Nayara Energy in 2017. This transaction remains the largest foreign direct investment in the oil and gas sector of your country. A large-scale program of petrochemical production with investments of about USD750 million is being implemented now, "he said.

Nayara Energy has the second largest refinery in India with a capacity of 20 million tons per year. The Indian company has already launched a refinery development program: within the first stage, it is planned to build units for the production of polypropylene (PP) with a capacity of up to 450,000 tonnes per year.

Nayara Energy's business also includes a deep-water port that can handle VLCC class extra-large tankers and one of India's largest retail chains.

As MRC informed before, the Anglo-Dutch oil and gas corporation Royal Dutch Shell plans to acquire a 50% stake in a petrochemical project planned by Nayara Energy (Mumbai, India) and involving investments of USD8-9 billion. Last June, the two companies signed a Memorandum of Understanding (MOU) on the creation of a joint venture (JV) for this project.

The planned complex, which will include a steam cracker with a capacity of 1.8 million tonnes per year and other plants, will be built in Vadinar, Gujarat, India, where Nayara Energy operates its refinery. This project will be completed in five years. It also includes a complex of aromatic hydrocarbons and will have a total production capacity of 10.75 million tonnes of petrochemicals per year.

Rosneft became Russia's largest publicly traded oil company in March 2013 after the USD55 billion takeover of TNK-BP, which was Russia’s third-largest oil producer at the time.

Serbia starts talks for sale of HIP Petrohemija to Gazprom Neft subsidiary

Serbia starts talks for sale of HIP Petrohemija to Gazprom Neft subsidiary

MOSCOW (MRC) -- Serbian authorities have officially begun negotiations with Gazprom Neft-controlled Naftna Industrija Srbije (NIS), which was the only one to file an application in the privatization of HIP Petrohemija, Serbia's largest petrochemical producer, said Finam, citing Secretary of State Serbian Ministry of Economy Dragan Stevanovic's statement.

"The government made appropriate decisions last week, and yesterday we officially started negotiations with NIS as a potential strategic partner," said Dragan Stevanovic as seen in a video file posted on the website of Tanjug news agency on Wednesday.

NIS placed the sole bid in a tender for a strategic partner in HIP Petrohemija earlier this month. The strategic partner intends to inject EUR150 million (USD177 million) in the capital of HIP Petrohemija, acquiring a stake of up to 90% in the company's capital.

"NIS has already accepted the commitments in its offer, which is that in the next six years it will invest EUR150 million in HIP Petrohemija's plant, will build a polypropylene production plant with a capacity of at least 140,000 tonnes per year and will keep the optimal number of workers," Stevanovic said.

As MRC informed earlier, in 2014, HIP Petrohemija began preparations for the integration of production with the Serbian NIS. The expansion and deepening of the industrial and technological ties of the companies, initiated by the government, was to be completed by March 2014. The facilities of both companies are located in the town of Pancevo, northeast of Belgrade.

It was also reported that in late 2012, HIP Petrohemija completed the modernization and expansion of a high density polyethylene (HDPE) plant. The capacity of the new unit increased by 30% and became over 90,000 tonnes per year. Somewhat earlier, an ethylene plant with a capacity of 200,000 tonnes per year was put into operation. The HDPE plant and ethylene plant had been closed since early September 2011 when the renovation and expansion project began.

The Serbian government owns a 75.27% stake in the capital of HIP Petrohemija, NIS owns 20.86%, Russia's Lukoil controls 3.09%, while the remainder is in the hands of smaller shareholders.

HIP Petrohemija owns petrochemical complexes in Pancevo, Elemir and Crepaja. It specialises in producing high-density polyethylene (HDPE), low-density polyethylene (LDPE) and other petrochemical products with an annual production capacity of 700,000 tonnes.

PP imports to Belarus up by 9.4% in Jan-Aug 2021

MOSCOW (MRC) -- Overall polypropylene (PP) imports to Belarus rose in the first eight months of 2021 by 9.4% year on year to 79,100 tonnes. Demand for all grades of propylene polymers increased, according to MRC's DataScope report.

August PP imports into the Republic of Belarus dropped to 9,400 tonnes from 9,500 tonnes a month earlier. Local companies raised their purchases of propylene homopolymer (homopolymer PP), whereas their purchased of propylene copolymers decreased. Overall imports of propylene polymers reached 79,100 tonnes in January-August 2021, compared to 72,300 tonnes a year earlier, demand for all grades of propylene polymers increased, with homopolymer PP accounting for the greatest growth in demand.

The supply structure by PP grades looked the following way over the stated period.

August imports of homopolymer PP grew to 7,600 tonnes from 7,200 tonnes a month earlier, purchases of injection moulding homopolymer PP in Russia increased. Overall imports of homopolymer PP reached 58,100 tonnes in January-August 2021, up by 9.7% year on year.

August imports of propylene copolymers to Belarus were 1,800 tonnes versus 2,300 tonnes a month earlier, local companies reduced their procurement of injection moulding block-copolymers of propylene (PP block copolymer) from Russian producers. Thus, overall imports of propylene copolymers reached 20,000 tonnes over the stated period, up by 8.6% year on year.


Poliom resumes PP production

MOSCOW (MRC) -- Poliom (joint venture of SIBUR and Gazprom Neft) has resumed operations at its polypropylene (PP) production after shutdown for a scheduled turnaround, according to ICIS-MRC Price report.

The plant's customers said the Omsk producer resumed its PP production on 13 October after the scheduled maintenance. The outage was short and lasted for a little less than two weeks. The plant's annual production capacity is 230,000 tonnes.

It is also worth noting that Stavrolen intends to shut its PP production for a 26-day turnaround on 22 October. The plant's annual production capacity is 120,000 tonnes.

Poliom, one of the largest PP producers in Russia, started its operations in 2013. Poliom was formed as a joint venture of such companies, as Gazprom Neft (25%), SIBUR (25%) and the Titan Group of Companies (50%), in 2014. In July 2019, SIBUR and Gazprom Neft consolidated 100% of the authorized capital of Poliom LLC. The range of manufactured products is about 100 PP grades. The propane-propylene fraction, which comes from the Omsk Oil Refinery Gazprom Neft, is the main feedstock for the plant's production. SIBUR provides distribution of finished products in the market of the Russian Federation and the CIS countries. The plant is certified according to international standards. The best developments and technologies are used at Poliom to ensure a zero-waste production cycle.