Crude futures down in Asia on uncertainty about any US intervention to curb rising oil prices

MOSCOW (MRC) -- Crude oil futures fell during midafternoon trade in Asia Nov. 12 on profit-taking activity following uncertainty about any US intervention to curb rising oil prices, including releasing some of its Strategic Petroleum Reserve, reported S&P Global.

At 2:59 pm Singapore time (0659 GMT), the ICE January Brent futures contract was down 68 cents/b (0.82%) from the previous settle at USD82.19/b while the NYMEX December light sweet crude contract was 62 cents/b (0.76%) lower at USD80.97/b.

"The uncertainty over how US may intervene to curb elevated oil prices may draw some profit-taking, coming off the back of a stronger US dollar and virus resurgences in China and Europe, which may dampen some sentiments on eventual reopening," IG market strategist Yeap Jun Rong told S&P Global Platts Nov. 12.

Some analysts have talked about the buildup of a risk-off sentiment as there were few events to move markets at the end of the week, particularly after recent headlines of higher-than-expected US inflation numbers weighing on investors' minds.

The US recorded its highest inflation rate in 31 years. Data from the Bureau of Labor Statistics showed Nov. 10 that consumer prices rose 6.2% year on year and 0.9% month on month.

This has also led to a stronger dollar index, which in turn impacted oil prices. At 2.59 pm in Singapore, the Dollar Index was trading at 95.20, up 0.02% from the previous close at 95.18.

Market watchers were awaiting moves from the Biden administration on a possible release of SPR crude in a bid to combat high gasoline prices, which might stem rising oil prices.

"US President Biden is facing pressure from fellow Democrats to address high gasoline prices with measures such as a ban on oil exports. He is still weighing the merits of an emergency release of crude from strategic reserves," ANZ research analysts said.

Echoing a similar sentiment, UOB Market Research has said that traders have remained concerned about whether the Biden administration would intervene to cool rising energy prices in response to growing political pressure, including from his own party.

Meanwhile, the OPEC+ alliance released its latest monthly market report late Nov. 11 that saw only marginal changes to supply and demand estimates for both this year and next. The group has downgraded its 2021 global oil demand forecast by 160,000 b/d.

The group also cut its demand estimates for the final quarter of this year, expecting that high energy prices will have a dampening impact on demand.

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, EIA said in a monthly report earlier this year, a smaller decline than its previous forecast for a drop of 210,000 bpd.
MRC

MOSCOW (MRC) -- Imports of suspension polyvinyl chloride (SPVC) into Ukraine fell in the first ten months of 2021 by 21% year on year, totalling 22,900 tonnes. Export sales of Ukrainian PVC rose by 18% year on year, with Turkey accounting for the largest export volumes, according to MRC's DataScope report.

Last month's SPVC imports to the Ukrainian market dropped to 2,200 tonnes from 2,300 tonnes in September, Ukrainian companies reduced their shipments of polymer from the USA. Overall SPVC imports reached 22,900 tonnes in January-October 2021, compared to 29,000 tonnes a year earlier. Limited export quotas of European and North American producers were the main reason for such a major fall in imports.

European producers with the share of about 86% of the total imports over the stated period were the key suppliers of resin to the Ukrainian market.
Karpatneftekhim reduced its export sales last month, thus, export sales of Ukrainian resin were 14,200 tonnes versus 16,300 tonnes in September. However, slightly over 160,200 tonnes of PVC were shipped for export in the first ten months of 2021, compared to 136,300 tonnes a year earlier.

MRC

MOSCOW (MRC) -- The November contract price of propylene was settled in Europe up by EUR95/tonne from the previous month. As a result, European producers raised their November contract polypropylene (PP) prices for the CIS countries. But the price increase was not proportional to the rise in monomer prices, according to ICIS-MRC Price report.

Negotiations over November export prices of European PP were over last week. Many market participants said almost all European producers still had export restrictions on propylene copolymers. There were fewer problems with the supply of propylene homopolymer (homopolymer PP).

At the same time, the increase in the cost of propylene led to an increase in the export prices of PP for shipments in November, and in some cases it was not proportional to the increase in the price of monomer. Deals for November shipments of homopolymer PP were done in the range of EUR1,675-1,780/tonne FCA, whereas last month's deals were done in the range of EUR1,600-1,680/tonne FCA.

Deals for block copolymers of propylene (PP block copolymers) were negotiated in the range of EUR1,950-2,000/tonne FCA, up by EUR100/tonne from the previous month.

MRC

MOSCOW (MRC) -- The board of Thirumalai Chemicals Ltd (TCL), at its meeting on the 2nd November 2021, approved the investment in a project to manufacture phthalic anhydride (PA) and fine-chemicals at its site in Dahej in Gujarat, India, according to Hydrocarbonprocessing.

The investment will be funded by TCL’s internal accruals and borrowings.

The project includes a 90,000 ton per year PA plant. It is scheduled for commissioning in H2 FY23-24. TCL already operates a PA plant at this site, commissioned about 6 mos ago. The project will use in-house technology.

TCL manufactures about 150,000 tons o fPA, food ingredients and fine chemicals at its existing sites in Ranipet and Dahej combined. TCL also manufactures about 50,000 metric t of maleic anhydride & derivatives from butane at its wholly-owned subsidiary in Malaysia.

TCL is currently implementing a large integrated butane to maleic anhydride and food ingredients (malic, fumaric acids & other derivatives) production facility, through a 100% owned step-down subsidiary in the United States. This facility is expected to be started-up in H2 FY23-24. TCL already produces these products in India and Malaysia since 1991.

As MRC reported earlier, in August 2021, Thirumalai Chemicals Limited announced its plan to execute a project to manufacture 180,000 tons per year of Phthalic Anhydride (PA) and 30,000 tons per year of Fine & Specialty Chemicals, at its existing site at Dahej, Gujarat, and Western India. The project is expected to be executed in two successive phases. Thirumalai expects to bring the first of these two phases on-stream in about 2 years after receipt of all needed approvals. Thirumalai Chemicals further said that the commissioning of the company’s first PA plant at Dahej, was delayed by the recent pandemic wave in Gujarat.

Phthalic anhydride is used widely to make colorants, resins for construction, infrastructure & housing, additives for polymers, including polyvinyl chloride (PVC), and inks.

According to MRC's ScanPlast report, Russia's overall production of unmixed PVC totalled 746,700 tonnes in the nine months of 2021, up by 4% year on year. All producers increased their output.

Thirumalai Chemicals Limited has been a leading producer of phthalic anhydride and derivatives over 45 years; its range of products includes Maleic Anhydride (produced by its subsidiary), food ingredients and fine chemicals. It presently has two manufacturing facilities - in South and West India; its subsidiary in Malaysia operates butane maleic anhydride & derivatives plants. All of these based on TCL’s in-house process technologies and engineering capabilities. The company sells its products primarily in India, South East Asia, Middle East and Europe, with some quantities in North America.
MRC