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