Crude oil futures rise in Asia on broad risk-on sentiment in financial markets

MOSCOW (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, reported S&P Global.

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.

Financial markets across Asia are being buoyed by a stellar US jobs report that showed the US adding jobs at a faster-than-expected pace, boosting hopes of a quick recovery from the COVID-19 pandemic.

US non-farm payrolls jumped 531,000 last month, the Department of Labor said, beating some analysts' forecasts of a 450,000 increase.

"Global risk sentiment received yet another boost after Friday's (Nov. 5) US nonfarm payrolls exceeded market expectations and the October unemployment rate fell to a 19-month low of 4.6%," OCBC Treasury Research analysts said in a note.

"Asian markets are likely to cheer the better-than-expected US labor market data this morning," they added.

Also adding to bullish sentiment was news that pharmaceutical giant Pfizer had stopped a trial for a COVID-19 experimental antiviral pill early after it was shown to cut by 89% the chances of hospitalization, or death, for adults at risk of developing severe disease.

This comes as the US on Nov. 8 reopens its borders to vaccinated travelers across the world, boosting the outlook for jet fuel demand as airplanes prepare to take to the skies again.

The latest developments will add to the overall bullish sentiment in oil prices as analysts maintain that oil markets remain in deficit and prices will continue to be supported going forward.

Market watchers also noted that Saudi Aramco had raised its December official selling prices, announced late Nov. 5, for Asia, Mediterranean, Europe and US-bound cargoes as strengthening Asian demand ahead of colder winter months is expected to tighten crude supplies.

"Saudi Aramco raised its official selling price of crude to all buyers across the globe, suggesting demand remains strong. This comes following OPEC's decision to stick with its scheduled 400,000 b/d increase in output despite consumers saying the current pace is too slow to sustain the post-COVID recovery," ANZ Research analysts Brian Martin and Daniel Hynes said.

As MRC informed earlier, Saudi Aramco's downstream business consumed 43.5% of the company's crude in the first nine months of 2021, while its bottom line for the third quarter to September was in the black amid an improvement in market conditions. During January-September 2020, Aramco's downstream oil consumption stood at 39.5%, the company said in an earnings report released Nov. 1.

We remind that in June 2020, Aramco finalized its USD69 billion acquisition of a 70% stake in Saudi Basic Industries Corp., the Middle East's biggest petrochemical maker. SABIC reported more than a fivefold year-on-year increase in its Q3 net profit to USD1.49 billion thanks to higher average sales prices.

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

MOSCOW (MRC) -- China National Offshore Oil Corporation Ltd., or CNOOC, has booked two diesel shipments in late October, totalling about 50,000 tonnes, for early November delivery into south China, a rare purchase spurred by a strong domestic diesel market, reported Reuters with reference to several trading sources.

China has been a net diesel exporter in recent years but a reduction in domestic refinery throughput since June has tightened supplies and led to a rally in wholesale prices of the main transportation and industrial fuel.

The government's clampdown on light cycle oil, a blending component for diesel, by imposing a hefty tax on imports also cut into supplies.

"Very strong domestic diesel prices have created a window to bring in imported diesel," said one source.

A widespread power curb as well as soaring natural gas prices have also lent support to diesel, as some industrial and commercial consumers shifted to standalone diesel generators and truck fleets switched to more diesel use from natural gas.

As MRC wrote before, CNOOC targets to produce 545 million-555 million barrels of oil equivalent, or 1.49 million-1.52 million boe/d, of oil and gas in 2021, up about 4.5% from its estimated production of 528 million boe in 2020, on the back of contribution from its 19 new projects, including Buzzard oil field phase II.

We remind that CNOOC Dongfang, a subsidiary of CNOOC, halted production at its propylene plant in Hainan province on March 2 for a schedule turnaround. It was expected that the maintenance at this plant with a capacity of 150,000 mt/year of propylene to continue until mid-April 2021.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, 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.

CNOOC is China's third largest national oil company after CNPC and Sinopec. The company was founded in 1982. The headquarters is located in Beijing. The company is engaged in the production, processing and marketing of oil and natural gas offshore China. The Chinese government owns 70% of the company's shares.
MRC

MOSCOW (MRC) -- Royal Dutch Shell Plc plans to restart this week units shut in September for a planned overhaul at its 302,800 barrel-per-day (bpd) joint-venture Deer Park, Texas, refinery, reported Reuters with reference to sources familiar with plant operations.

Fuel-gas treating units have restarted and work is being completed on the 45,900 bpd reformer and an aromatics unit, the sources said.

A Shell spokesperson did not immediately reply to a request for comment.

Shell is preparing to transfer control of the refinery to its joint-venture partner Petroleos Mexicanos (Pemex), Mexico’s national oil company, by the end of the year for USD596 million in cash and debt plus the value of inventory on-hand.

Shell and Pemex announced the sale of Shell’s interest in May. Shell has sold all but two of its refineries as part of a plan to depart US refining.

Shell’s Norco, Louisiana, refinery is restarting following repairs of damage from Hurricane Ida, which struck at the end of August.

As MRC informed earlier, Royal Dutch Shell plans to reduce its refining and chemicals portfolio by more than half, it said in July 2020 without giving a precise timeframe. The move is part of the Anglo-Dutch company's plan to shrink its oil and gas business and expand its renewables and power division to reduce greenhouse gas emissions sharply by 2050.

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.

Royal Dutch Shell plc is an Anglo-Dutch multinational oil and gas company headquartered in The Hague, Netherlands and with its registered office in London, United Kingdom. It is the biggest company in the world in terms of revenue and one of the six oil and gas "supermajors". Shell is vertically integrated and is active in every area of the oil and gas industry, including exploration and production, refining, distribution and marketing, petrochemicals, power generation and trading.
MRC

MOSCOW (MRC) –- As of November 2021, Ekornes, a Norwegian manufacturer of high-end design furniture, uses expandable polystyrene (EPS) protective packaging that has a lower carbon footprint than virgin material by safeguarding the same properties. This is achieved by replacing fossil resources with recycled raw materials at the beginning of production. BASF supplies Styropor Ccycled to VARTDAL PLAST, who converts the material into moulded packaging parts for Stressless furniture made by Ekornes, as per BASF's press release.

“We are really proud to be the first company to launch this project together with VARTDAL PLAST and BASF with regards to design furniture. We always strive to have the best packaging solution to protect our quality furniture, and Styropor Ccycled offers exactly what we want: same properties as virgin material but at the same time meeting the needs to reduce our carbon footprint, a perfect fit into our sustainability strategy,” says Solveig Gaundal, Compliance and CSR Manager at Ekornes.

Due to its manufacturing process, Styropor Ccycled has the same properties as conventional Styropor. This maintains the excellent packaging properties such as outstanding impact absorption and high compressive strength, which are essential for the protection of sophisticated design furniture. In the production of the packaging foams that have become so well-known over the last 70 years, pyrolysis oil replaces fossil raw materials. BASF sources this oil from technology partners who use a thermochemical process called pyrolysis to transform post-consumer plastic waste that would otherwise be used for energy recovery or go to landfill into this secondary raw material. BASF then uses the oil at the very beginning of the value chain to manufacture new plastics and other products.

Since recycled and fossil raw materials are mixed in production and cannot be distinguished from each other, the recycled portion is allocated to Styropor Ccycled using a mass balance approach. Both the allocation process and the product itself, have been certified by an independent auditor. Compared with conventional Styropor, at least 50% of CO2 is saved in the production of Styropor Ccycled.

Also, for the converter VARTDAL PLAST Styropor Ccycled brings a lot of advantages as the product is identical to virgin material. Therefore, the production process does not have to be adjusted. The company and their products are certified according to the ecoloop certification programme, confirming that for the products 100% recycled material was used as feedstock. “We are thrilled to be working together with BASF and Ekornes on this project. This is a testament of our mutual commitment towards a more sustainable future,” says Mounir El'Mourabit, product manager at VARTDAL PLAST.

As MRC reported earlier, BASF is strengthening its global catalyst development and helping customers to bring new products faster to the market. As part of this strategy, BASF is building a new pilot plant center at its Ludwigshafen site. The new Catalyst Dv'elopment and Solids Processing Center will serve as a global hub for pilot-scale production and process innovations of chemical catalysts. The new building is scheduled for completion by mid-2024.

We remind that BASF aims is to electrify its production processes for basic chemicals, which are currently based on fossil fuels.

According to MRC"s ScanPlast report, the total estimated EPS consumption in Russia grew in August 2021 by 15% year on year to 11,650 tonnes. Russia's overall EPS production totalled 8,770 tonnes over the stated month, down by 8% year on year.

BASF is the leading chemical company. It produces a wide range of chemicals, for example solvents, amines, resins, glues, electronic-grade chemicals, industrial gases, basic petrochemicals and inorganic chemicals. The most important customers for this segment are the pharmaceutical, construction, textile and automotive industries.
MRC

MOSCOW (MRC) -- ALPLA has made production at three of its facilities climate neutral, said the company.

The sites in Exter, Lubeck and Foritztal in Germany have all been made climate neutral in accordance with Scopes 1 and 2 using carbon certificates. The project began earlier this year with the aim of reducing carbon dioxide equivalent (CO2e) emissions, and the first step was to convert to green electricity.

This move reduced emissions from around 22,000 tonnes of CO2e emitted in 2020 to just under 2,000 tonnes of Scopes 1 and 2 CO2e emitted in 2021, the equivalent of running 4,400 passenger vehicles a year. In order to offset the remaining 2,000 tonnes of CO2e emitted, carbon certificates were purchased to make the plants carbon neutral in accordance with Scopes 1 and 2.

A further 500 tonnes of CO2e were voluntarily offset through a reforestation programme, supporting damaged areas and preservation of the forest in Bosingfeld, around 30km from the Exter plant, covering an area of 1.25 hectares.

As MRC informed earlier, ALPLA will build a new 23,000 square-metre manufacturing plant in Kansas City, Missouri. ALPLA Group, a global packaging solutions manufacturer and recycling specialist headquartered in Hard, Austria, announced that it has selected the Kansas City region for its new 23,000-square-metre manufacturing plant.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,638,370 tonnes in the first eight months of 2021, up by 10% year on year. Shipments of all grades of ethylene polymers increased. At the same time, PP shipments to the Russian market were 989,570 tonnes in the first eight months of 2021, up by 30% year on year. Deliveries of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased, whereas shipments of injection moulding PP random copolymers decreased significantly.

ALPLA , with about 21,600 employees, produces custom-made packaging systems, bottles, caps and moulded parts at 178 sites across 45 countries. It also operates recycling plants for polyethylene terephthalate (PET) and high density polyethylene (HDPE).
MRC