Crude oil futures rise in Asia after 10-day lows as sentiment recovers

Crude oil futures rise in Asia after 10-day lows as sentiment recovers

MOSCOW (MRC) -- Crude oil futures were higher in midmorning trade in Asia Nov. 16, rallying from 10-day lows as investor sentiment recovers and the near-term outlook for prices remained bullish, reported S&P Global.

At 10:43 am Singapore time (0243 GMT), the ICE January Brent futures contract was up 75 cents/b (0.91%) from the previous close at $82.80/b, while the NYMEX December light sweet crude contract rose 58 cents/b (0.72%) to $81.46/b.

A few bruising sessions had pushed oil prices to lows not seen since Nov. 5, though analysts maintained that the outlook for prices remained bullish as demand continues to outstrip supply.

"An undersupplied backdrop is keeping oil on a strong footing. OPEC+ has decided against raising the rate of production increases, and US shale production is yet to pick up," said ANZ Research analysts Soni Kumari and Daniel Hynes in a note.

The daily charts for both front-month contracts showed oil prices printing a hammer formation in the last trading session, indicating a potential reversal in price direction. Oil prices in recent days have pared steep intra-day losses to close near their opening levels as buyer support rushed in despite a recent spate of bearish headlines.

CEO of Western trading house Vitol Russell Hardy said Nov. 15 that global oil market fundamentals will likely remain tight over the coming year as oil demand continues to build after having mostly fully recovered to 2019 pre-pandemic levels.

Oil demand for industrial usage has already exceeded 2019 levels while jet fuel demand for aviation continues to lag pre-pandemic levels, meaning global oil demand is "pretty much caught up with 2019," Hardy said at a conference in Abu Dhabi.

Nonetheless, analysts cautioned that risks to the near-term outlook for prices remained. Europe was now battling its fourth wave of COVID-19 infections, while oil consuming giant China is also tackling a fresh outbreak though daily caseloads appeared to be falling. The country's National Health Commission reported 32 locally transmitted cases as of Nov. 14, down by 38 on the day.

As MRC wrote previously, the average utilisation rate at China's four state-owned refiners fell to a five-month low of 80.6% in October from 81.5% in September while independent refiners also maintained run rates at low levels due to feedstock shortage. These would likely lead the country's crude throughputs to extend the downward trend in October from the 17-month low of 13.7 million b/d, or 56.07 million mt, in September, according to data from the National Bureau of Statistics.

The four state oil companies -- Sinopec, PetroChina, CNOOC and Sinochem - plan to process a total 7.67 million b/d of crudes in October, against their nameplate capacity of 9.52 million b/d, Platts data showed. This compared with a planned throughput of 7.7 million b/d in September. In November, the state-run refiners plan to lift throughput from the low base in October to boost gasoil and gasoline supplies for meeting domestic demand, refining sources said.

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

Fire at Pertamina refinery complex in Calicap extinguished

Fire at Pertamina refinery complex in Calicap extinguished

MOSCOW (MRC) -- A fire at Pertamina’s refinery complex in Cilacap, Central Java province, has been fully extinguished without disrupting production activity, reported Reuters with reference to the chief executive of the Indonesian energy company's statement.

The fire started around 7:20 p.m. (1220 GMT) on Saturday at a fuel storage unit. Amateur videos broadcast by local media showed a large blaze colouring the sky orange.

“The fire at one out of the 228 tanks at Cilacap didn’t cause any shutdown, so there was no impact to the production,” Nicke Widyawati, CEO of Pertamina, told a media briefing on Sunday.

The cause of the fire is still being investigated, Nicke said.

She added that supply conditions for motor fuels and liquefied petroleum gas were secure.

Cilacap is one of Pertamina’s biggest refining facilities and supplies around 34% of Indonesia’s fuel demand, Pertamina said on its website.

As MRC informed before, PT Pertamina resumed operations at its sole polypropylene (PP) plant in Plaju, South Sumatera in mid-October, 2021, after a scheduled maintenance. The outage at the company's 47,000 mt/year of PP plant began on 16 September and was to last for about 17 days. Thus, this plant was initially scheduled to resume operations on 3 October, 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 1,868,160 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.

Pertamina is an Indonesian state-owned oil and natural gas corporation based in Jakarta. It was created in August 1968 by the merger of Pertamin (established 1961) and Permina (established 1957). Pertamina is the world's largest producer and exporter of liquefied natural gas (LNG).
MRC

China Ministry of Commerce allocates extra 1 mln mt bunker oil export quota to Sinopec, PetroChina and CNOOC

China Ministry of Commerce allocates extra 1 mln mt bunker oil export quota to Sinopec, PetroChina and CNOOC

MOSCOW (MRC) -- China's Ministry of Commerce on Nov. 10 allocated an additional 1 million mt of quotas to Sinopec, PetroChina and CNOOC to export their domestically produced bunker fuel oil for bonded bunkering at China's ports in 2021, reported S&P Global with reference to sources with knowledge of the matter.

Meanwhile, the ministry has also approved Sinochem to transfer 230,000 mt of its bunker fuel oil export quota to export gasoline, gasoil and jet fuel in the rest of the year, the sources said. As a result, the total volume of fuel oil export quotas for 2021 will amount to 11.77 million mt.

China in January-October produced about 9.2 million mt of bunker fuel oil for export to the country's bonded ports for bunkering, according to local information providers.

Moreover, the volume of gasoline, gasoil and jet fuel export quotas amounts to 37.23 million mt for 2021, with Sinochem's quota transfer. In comparison, the country exported 33.70 million mt of these three key products in January-September, data from General Administration of Customs showed.

On Nov. 10, MOFCOM also approved PetroChina, Sinopec and Sinochem to transfer their key oil products export quotas, totaling 969,000 mt, from the processing trade route to the general trade route.

Under the processing trade route, export quotas are restricted to specific refineries, specific volumes and specific products.

Sinochem's key oil product export quotas under the processing trade route were allocated to the 15 million mt/year Quanzhou Petrochemical that it built.

With the transfer to the general trade route, the state-owned oil company will be able to fully use the quotas by sourcing from the ChemChina refineries that it merged this year, as Quanzhou Petrochemical is going to shut for scheduled maintenance around the end of November into early December, a company source said.

As MRC wrote before, China's Sinochem Quanzhou Petrochemical began production of ethylene vinyl acetate (EVA) at a new EVA/high density polyethylene (LDPE) plant in Quanzhou, Quanzhou, Fujian, China on July 10,2021. In early July, this year, the company began production of LDPE at this plant with a capacity of 100,000 tons of EVA/LDPE per year. The plant was originally slated to be launched in Q4 2020, but the launch had to be postponed due to the coronavirus pandemic. Then the start of the test production was postponed to Q2, 2021.

According to MRC's DataScope report, September EVA imports to Russia fell by 14,2% year on year to 3,070 tonnes from 3,570 tonnes a year earlier, whereas overall imports of this grade of ethylene copolymer into the Russian Federation rose in January-September 2021 by 21,13% year on year to 33,35 tonnes (27,520 tonnes in the first nine months of 2020).

China Petrochemical Corporation (Sinopec Group) is a super-large petroleum and petrochemical enterprise group established in July 1998 on the basis of the former China Petrochemical Corporation. Sinopec Group"s key business activities include the exploration and production of oil and natural gas, petrochemicals and other chemical products, oil refining.

PetroChina Company Limited, is a Chinese oil and gas company and is the listed arm of state-owned China National Petroleum Corporation (CNPC), headquartered in Dongcheng District, Beijing. It is China's biggest oil producer.

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

PVC production in Russia up by 3% in Jan-Oct 2021

MOSCOW (MRC) -- Russia's overall production of unmixed polyvinyl chloride (PVC) totalled 828,600 tonnes in the fist ten months of 2021, up by 3% year on year. At the same time, only two producers raised their output, according to MRC's ScanPlast report.

October production of unmixed PVC dropped to 81,900 tonnes from 82,600 tonnes a month earlier, lower output was caused by a scheduled shutdown for maintenance at Kaustik (Volgograd). Overall output of polymer totalled 828,600 tonnes in January-October 2021, compared to 804,900 tonnes a year earlier. Two producers increased their production, whereas two manufacturers maintained their last year's figures.

The structure of PVC production by plants looked the following way over the stated period.


RusVinyl produced slightly over 30,000 tonnes of PVC in October, with emulsion polyvinyl chloride (EPVC) accounting for 2,600 tonnes, compared to 28,000 tonnes a month earlier. RusVinyl's overall output of resin reached 289,200 tonnes in the first ten months of 2021, compared to 277,100 tonnes a year earlier. Higher production was mainly caused by the absence of a shutdown for maintenances this year.

SayanskKhimPlast also slightly raised its output last month and produced just over 28,000 tonnes of suspension PVC (SPVC), compared to 27,200 tonnes in September. The Sayansk plant managed to produce 254,300 tonnes of PVC in over the stated period, compared to 243,800 tonnes a year earlier.

Baskhir Soda Company produced 23,400 tonnes in October versus 22,700 tonnes a month earlier. Baskhir Soda Company's overall output of resin reached 222,300 tonnes in January-October 2021, which virtually corresponds to the last year's figure.

Kaustik (Volgograd) produced 0,400 tonnes of suspension polyvinyl chloride (SPVC) last month, whereas this figure was at 4,600 tonnes in September. The plant's overall production of resin reached 62,700 tonnes over the stated period, which corresponds to the last year's figure.

MRC

PP imports to Ukraine remained steady in January-October

MOSCOW (MRC) -- Ukraine's polypropylene (PP) imports totalled about 113,300 tonnes in the ten months of 2021, which practically corresponded to the same figure last year. Only some grades of propylene copolymers imports have grown, according to MRC's DataScope.

October PP imports to Ukraine decreased to 13,300 tonnes from 16,800 tonnes a month earlier, local companies decreased their purchasing of propylene homopolymers (homopolymer PP) from Russia and Saudi Arabia. Overall imports of propylene polymers reached 113,300 tonnes in January-October 2021, compared to 113,000 tonnes a year earlier; demand only for homopolymer PP decreased, whereas demand for propylene copolymers increased.

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

October imports of homopolymer PP into the Ukrainian market decreased to 10,700 tonnes, while a month earlier this figure was 13,100 tonnes. Producers from Russia and Saudi Arabia decreased their export volumes. Thus, overall homopolymer PP imports reached 85,200 tonnes in the first ten months of 2021, down by 2% year on year.

Last month's imports of block copolymers of propylene (PP block copolymers) were about 1,200 tonnes, compared to 1,700 tonnes in September, a small decrease in supplies of injection moulding PP block copolymers was seen. About 11,000 tonnes of PP block copolymers were imported in the ten months of this year, compared to 11,400 tonnes a year earlier.

October imports of statistical copolymers of propylene (PP random copolymers) decreased to 1,600 tonnes from 1,700 tonnes a month earlier due to weaker demand for pipe grade PP. Total PP random copolymer imports to Ukraine reached 14,200 tonnes in the first ten months of the year, compared with 12,900 tonnes year on year. Overall imports of other propylene copolymers totalled slightly over 2,900 tonnes over the stated period.

MRC