U.S. demand for crude among refiners making gasoline and diesel surged

U.S. demand for crude among refiners making gasoline and diesel surged

MOSCOW (MRC) -- Crude oil tanks at the Cushing, Oklahoma storage hub are more depleted than they have been in the last three years, and prices of further dated oil contracts suggest they will stay lower for months, said Reuters.

U.S. demand for crude among refiners making gasoline and diesel has surged as the economy has recovered from the worst of the pandemic. Demand across the globe means other countries have looked to the United States for crude barrels, also boosting draws out of Cushing.

Analysts expect the draw on inventories to continue in the short-term, which could further boost U.S. crude prices that have already climbed by about 25% in the last two months. The discount on U.S. crude futures to the international Brent benchmark should stay narrow. "Storage at Cushing alone has the potential to really rally the market to the moon," said Bob Yawger, director of energy futures at Mizuho.

Cushing stockpiles have dropped to 31.2 MM barrels, the lowest since October 2018, the Energy Information Administration said last week, or about half of where inventories were at this time a yr ago. Inventories have fallen because of a ramp-up in U.S. demand, which has encouraged domestic refiners to keep crude at home to provide fuel such as gasoline and distillates to U.S. consumers, said Reid I'Anson, senior commodity analyst at Kpler.

In addition, U.S. production has been slow to recover from declines seen in 2020. At the end of 2019, the nation was producing roughly 13 MM barrels of oil per day (bpd), but in recent weeks has been less than 11.5 MMbpd. At the same time, product supplied by refineries - a proxy for demand - is about just 1% below pre-pandemic peaks.

As a result, the spread between U.S. crude and international benchmark Brent, has collapsed. The spread between U.S. crude delivered to Cushing and Brent narrowed to roughly USD1.09 a barrel this week from USD4.47 earlier this month, which had been about the widest spread since May 2020.

In an additional sign of high short-term demand for U.S. crude, the premium for U.S. crude delivered this December versus December 2022 reached a high this week of USD12.48 per barrel, most since at least 2014, according to Refinitiv Eikon data. In the next three months, Rystad Energy expects refinery runs in the United States to increase by 500,000 to 600,000 bpd. This would outpace production gains of 300,000-400,000 bpd, and keep the WTI/Brent spread narrow.

"Only if OPEC (the Organization of the Petroleum Exporting Countries) intervenes with more supply of crude or if COVID rears its ugly head again, curbing demand, this high volatility will come off," said Mukesh Sahdev, senior vice president and head of downstream at Rystad Energy.

As per MRC, crude oil futures edged higher in mid-morning trade in Asia Nov. 8, extending gains from the previous session amid a broad risk-on sentiment in financial markets following a strong US jobs report and news of Pfizer's antiviral drug. At 10:10 am Singapore time (0210 GMT), the ICE January Brent futures contract was up USD1.03/b (1.24%) from the previous close at USD83.75/b, while the NYMEX December light sweet crude contract rose USD1.02/b (1.26%) at USD82.29/b. Both benchmarks had settled higher by 2.7%-3.1% in the last session Nov. 5.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC

Haldor Topsoe and Hyundai Oilbank sign MOU to joinly develop green energy solutions

Haldor Topsoe and Hyundai Oilbank sign MOU to joinly develop green energy solutions

MOSCOW (MRC) -- Hyundai Oilbank and Haldor Topsoe have signed an MOU to jointly identify opportunities within blue and green hydrogen, waste plastic recycling, bio-refinery, eFuels, CCUS and other solutions to reduce carbon emissions, according to Hydrocarbonprocessing.

The MOU will support Topsoe in further optimizing its clean energy technologies and potentially enable Hyundai Oilbank to increase its low-carbon business and meet the company’s target that 70% of total profit should derive from eco-friendly business by 2030.

Both Topsoe and Hyundai Oilbank strive to mitigate climate change. Topsoe develops cutting-edge technologies within green hydrogen, green ammonia, eMethanol, and eFuels. Hyundai Oilbank has started a transformation of its production to significantly reduce carbon emissions in its customer offerings.

Under the MOU, the two parties will collaborate on developing sustainable and efficient solutions within a range of green energy solutions.

As MRC reported before, in October 2021, Dow (Midland, Michigan), the world's petrochemical major, and Haldor Topsoe partnered to promote the circular economy. About 300 million tons of plastic waste is produced every year on a global scale. The partnership between Dow and Topsoe marks a new initiative to efficiently convert waste plastics to circular plastics, keeping them out of the environment and responsibly reclaiming their value. Plans include Dow to proceed with the design and engineering for a 10,000 ton per year market development unit using Haldor Topsoe’s PureStepTM technology to purify pyrolysis oil feedstock derived from waste plastics for use in circular products.

We remind that in October 2021, Dow also announced several advancements in its efforts to prevent plastic waste, reduce greenhouse gas emissions and provide customers with recycled plastic products. The company says these advancements will help it to provide initial supply of fully circular polymers to customers starting in 2022.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in January-September 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding statistical copolymers of propylene (PP random copolymers) decreased significantly.
MRC

Solvay Q3 net profit rises amid strong demand, sales volumes

Solvay Q3 net profit rises amid strong demand, sales volumes

MOSCOW (MRC) -- Solvay's underlying net profit rose by 54.9% year on year in the third quarter to EUR273m, driven by stronger sales volumes and demand , said Reuters.

The company now sees free cash flow at the end of the year of around 800 million euros (USD928 million), up from previous guidance of 750 million euros which had already been upgraded in July.

"Further actions are being implemented to account for the rising raw materials, energy and logistics costs," Chief Executive Officer Ilham Kadri said in a statement. Solvay, whose products range from base chemicals such as soda ash to speciality polymers, reported third-quarter sales of 2.57 billion euros, beating a company-provided consensus of 2.41 billion euros.

Earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter stood at 599 million euros, also above a consensus of 570 million euros.

The company, which makes lithium derivatives for batteries, confirmed its guidance for full-year EBITDA of 2.2 to 2.3 billion euros, flagging however that energy prices would continue to be high in the fourth quarter.

As MRC informed earlier, Solvay says it aims to reduce emissions further from its own production plants and related to the energy it purchases, and include in its 2030 sustainability targets emissions in the value chains connected to Solvay’s activities.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in the first nine months of 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.
MRC

Clariant and Air Liquide present MegaZonE

Clariant and  Air Liquide present MegaZonE

MOSCOW (MRC) -- Clariant’s long-term partnership with Air Liquide Engineering & Construction has resulted in another major breakthrough in methanol synthesis: the MegaZonE technology, said the company.

Based on Clariant’s MegaMax® catalyst series, this innovative method uses several layers of catalysts with different activity levels to optimize heat management and overall catalyst performance in the methanol synthesis reactor.

Furthermore, the properties of each catalyst layer are tailored to the specific conditions along the reaction pathway, which results in a significantly longer catalyst lifetime (by up to 2 yrs) and an increased cumulative methanol production (up to 15%), thus potentially leading to monetary benefits of up to several MM US dollars. With this performance outlook, MegaZonE was successfully applied to two world-scale methanol plants in Asia this yr, showing already excellent and stable performance.

Stefan Heuser, Senior Vice President and General Manager at Clariant Catalysts, commented, “MegaZonE is a game-changer for both current and future methanol producers as it allows more compact and resilient designs, ultimately resulting in increased profits for our customers. It is another example of the close cooperation between our innovative catalyst R&D team and our longstanding engineering partner Air Liquide Engineering and Construction."

MegaZonE enables increased efficiency of the methanol synthesis loop, thus, the loop can be operated at milder conditions. Catalysts with moderate activity are loaded in hotter zones of the converter to prevent hotspots, while activity-enhanced catalysts are placed further down the reaction pathway to intensify reaction rates in the lower portion of the converter. On the one hand, less thermal stress on catalysts will lead to longer catalyst lifetimes. On the other hand, high activity in the bottom part of the reactor will increase reaction rates and reduce by-product formation by up to 10%. MegaZonE technology is a drop-in solution and enables tailored refill options for process optimizations of existing units. It also allows a more compact and resilient design for new plants.

Moreover, the possibility to use different feed sources, such as stranded gas, unused syngas, or CO2- rich gases, can drastically reduce the CO2 footprint of methanol producers, making MegaZonE also a highly sustainable solution.

As per MRC, Clariant says that its board has appointed Conrad Keijzer as the company’s new CEO, effective 1 January 2021. Hariolf Kottmann, Clariant’s executive chairman ad interim, will return to his position as chairman of the board, once Keijzer assumes responsibility.

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 1,868,160 tonnes in the first nine months of 2021, up by 18% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 1,138,510 tonnes in the first nine months of 2021, up by 30% year on year. Supply of propylene homopolymer (homopolymer PP) and block-copolymers of propylene (PP block copolymers) increased, whereas supply of injection moulding PP random copolymers decreased significantly.

Clariant AG is a Swiss chemical company and a world leader in the production of specialty chemicals for the textile, printing, mining and metallurgical industries. It is engaged in processing crude oil products in pigments, plastics and paints.
MRC

Indian Reliance Industries exits US shale gas sector business

Indian Reliance Industries exits US shale gas sector business

MOSCOW (MRC) -- Reliance Industries (RIL) has exited all its business in the upstream oil and gas shale play that was based out of the United States, according to Business Standard.

A company statement said that Reliance Eagleford Upstream Holding, a wholly-owned step-down subsidiary of Reliance Industries, announced the signing of agreements with Ensign Operating III, a Delaware limited liability company, to divest its interest in certain upstream assets in the Eagleford shale play of Texas, USA.

"With this transaction, Reliance has divested all its shale gas assets and has exited from the shale gas business in North America," RIL said.

Reliance said that a Purchase and Sale Agreement has been signed between REUHLP and Ensign on November 5, 2021 for this sale. The sale is at a consideration higher than current carrying value of the assets.

RIL officials refused to disclose the price at which this transaction took place. The company is now left with nil interest in US-shale assets. A part of the Eagleford asset was sold in March 2018 to Sundance Energy for about USD100 million.

Earlier this year, RIL had divested all of its interest in certain upstream assets in the Marcellus shale play of southwestern Pennsylvania. Those assets were sold to Northern Oil and Gas, (NOG), a Delaware corporation. The deal was for a consideration of USD250 million cash and warrants that give entitlement to purchase 3.25 million common shares of NOG at an exercise price of USD14.00 per common share in next seven years. A Purchase and Sale Agreement was signed between Reliance Marcellus and NOG on February 3, 2021 for this sale.

As MRC reported earlier, Indian refining giant Reliance Industries is doubling its polyethylene terephthalate (PET) recycling capacity by setting up a recycled polyester staple fiber (PSF) manufacturing facility in Andhra Pradesh. The move is part of RIL's commitment to lead the industry on circular economy, enhance its sustainability quotient and bolster the entire polyester and polymer value chain.

According to MRC's ScanPlast report, August estimated PET consumption in Russia reached 65,350 tonnes, up by 19% year on year. Russia's overall estimated PET consumption increased in the first eight months of 2021 by 12% year on year to 535,610 tonnes.

Reliance Industries is one of the world's largest producers of polymers. Thus, the company produces among others polypropylene, polyethylene and polyvinyl chloride.
MRC