MOSCOW (MRC) -- Crude oil futures were lower during mid-morning trade in Asia Nov. 17, after concerns of tight supply eased amid expectations of increasing US shale activity and reports of the US requesting China to release its oil reserves, reported S&P Global.
At 11:24 am Singapore time (0324 GMT), the ICE January Brent futures contract was down 63 cents/b (0.76%) from the previous close at USD81.80/b, while the NYMEX December light sweet crude contract fell by 67 cents/b (0.83%) to USD80.09/b.
Oil prices slipped as the support from a tight supply outlook eroded slightly following the release of the International Energy Agency's monthly Oil Market Report late Nov. 16, which highlighted the role that post-hurricane increase in US shale production, spurred by strong oil prices, played in meeting recovering demand.
"The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon...not because demand is declining, but rather due to rising oil supplies," according to the report.
The expectation of rising shale production was backed by the US Energy Information Administration's monthly Drilling Productivity Report released Nov. 15, which forecasts an 85,000 b/d increase in oil production from November to December, the largest of which is likely from the Permian basin.
In addition, media reports of the US requesting China to release its oil reserves to help stabilize strong crude oil prices, as part of ongoing economic negotiations between the two countries, has bolstered expectations of an increase in supply.
The US government has been flirting with the idea of releasing its own strategic petroleum reserves after the OPEC+ alliance refused to heed calls in their November meeting to loosen oil production taps, but has yet to make an official decision on the matter.
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