Crude oil prices drop as investors assess impact of Omicron coronavirus variant

MOSCOW (MRC) -- Oil prices edged lower in choppy trade on Wednesday, taking a breather after gains earlier this week, as investors assessed the impact of the Omicron coronavirus variant on the global economy, reported Reuters.

The market had a muted reaction to US weekly inventory figures, which showed a smaller-than-anticipated decline in crude stocks and another bump up in overall production, giving credence to expectations that supply will increase in coming months.

Brent crude futures were down 15 cents, or 0.2%, to USD75.29 a barrel at 10:52 a.m. EDT (1552 GMT). US West Texas Intermediate crude was at USD71.94 a barrel, down 16 cents or 0.3%.

Brent crude prices have rebounded by over 9% since Dec. 1 on signs Omicron has had only a limited impact on oil demand, after a 16% drop since Nov. 25.

"Around two-thirds of the previous price slide (has) been corrected," Commerzbank said in a note.

"There has been no noticeable slowing effect on oil demand as yet. Even aviation, the sector that should have been hit first, has seen only a marginal decrease in seating capacity."

The emergence of the Omicron variant combined with the U.S. decision to release inventories from its strategic reserve to knock the market back on expectations that supply would outweigh demand by the early months of 2022.

Ultimately, the Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, chose to maintain its schedule of boosting supply by 400,000 barrels per day every month - despite fears that the new coronavirus variant would sap demand.

US output, meanwhile, rose to 11.7 million barrels per day in the most recent week, though weekly output figures are volatile. The US Energy Department also said gasoline and distillate inventories rose more than anticipated, while crude stocks fell by a mere 240,000 barrels, less than expected.

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) -- Abu Dhabi National Oil Company (ADNOC) and GE Gas Power have announced a joint cooperation initiative to develop a decarbonization roadmap that includes reducing carbon emissions from gas turbines used to power ADNOC’s downstream and industry operations, including at the world-scale Ruwais Industrial Complex, in Abu Dhabi in the United Arab Emirates (UAE), according to Hydrocarbonprocessing.

This initiative further supports the UAE Net Zero by 2050 Strategic Initiative and strengthens ADNOC’s position as one of the world’s least carbon-intensive oil and gas producers. The announcement follows the recent clean power agreement between ADNOC and Emirates Water and Electricity Company (EWEC) and enhances ADNOC’s pathway to decarbonization while enabling sustainable future growth.

Ahmed Omar Abdulla, Senior Vice President, Refining & Petrochemical Asset Management, ADNOC said: “ADNOC’s initiative with GE reinforces our commitment to support the UAE’s goal to achieve net zero carbon emissions by 2050 and our ongoing commitment to decarbonizing our operations. This agreement is in line with our energy transition strategy and underscores our commitment to sound environmental stewardship while meeting the needs of the world’s growing energy demands. Working together with GE to develop sustainable solutions for power generation also furthers our ambitions to progress hydrogen as a future fuel and will leverage our industry-leading capabilities in carbon capture and storage.”

Under the terms of the initiative, ADNOC and GE will explore using hydrogen and hydrogenblended fuels for lower-carbon power generation; evaluating introducing ammonia as a fuel to power ADNOC’s GE gas turbines; integrating carbon capture solutions at ADNOC’s power generation facilities; and joint research and development (R&D) programs to develop innovative solutions to reduce carbon emissions from gas-based power generation.

The announcement is a continuation of ADNOC and GE’s cooperation to enhance the performance and sustainability of ADNOC’s operations. ADNOC and GE recently enhanced the efficiency and performance of ADNOC Refining’s General Utilities Plant (GUP) in Ruwais, with upgrades to installed GE gas turbines increasing power output while utilizing the same amount of fuel. Through this new initiative, GE helps bring its industry leading hydrogen experience to ADNOC. Globally, more than a hundred GE gas turbines have operated on fuels that contain hydrogen, accumulating over 8 MM operating hours.

The GUP provides electricity and water to the entire Ruwais Industrial Complex. ADNOC is also enhancing the performance and sustainability of the GUP with the development of a waste heat recovery facility. Upon completion of this facility in 2023, the innovation will increase the thermal efficiency of the site by nearly 30%.

As MRC reported earlier, in mid-November 2021, ADNOC signed of a strategic partnership with Borealis AG that confirms a USD6.2 B (AED22 B) investment agreement between the companies to build the fourth Borouge facility - Borouge 4 - at the polyolefin manufacturing complex in Ruwais, United Arab Emirates (UAE), which will produce 1.4 MM tons of polyethylene (PE) per year.

Expansion project includes construction of a 1.5 MM tons ethane cracker, two state-of-the-art Borstar PE plants and a cross-linked PE plant. Borouge 4 will meet growing customer demand across the Middle East, Africa and Asia with differentiated polyolefin solutions in energy, infrastructure, and advanced packaging.

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) -- Saudi Aramco Technologies Company and Sumitomo Chemical Company, Limited, have formed a technology partnership with Axens in support of Axens’ AlphaButol licensed process to enhance 1-butene production by using the AFA (anti-fouling agent) technology, as per Hydrocarbonprocessing.

The AFA technology, jointly developed by Aramco and Sumitomo Chemical, works in conjunction with Axens’ catalyst system to substantially reduce undesired polymeric fouling in 1-butene units. Aramco and Sumitomo Chemical have granted Axens the right to sublicense this beneficial technology to existing and prospective licensed units of AlphaButol.

Rabigh Refining & Petrochemical Company, an affiliate of Aramco and Sumitomo Chemical, and a licensee of AlphaButol, is the first to benefit from this technology. The AFA technology was effective in broad ranges of industrially relevant operating windows and duration in its 1-butene production units. “The AFA has demonstrated a real breakthrough in unit operation profitability, via higher production rates and reduced maintenance costs, due to lower levels of fouling. Removability of the fouling has also been improved with a substantially easier way to clean the unit, leading to shorter maintenance periods,” said Mohammed A. Basaffar, Section Head of Polymer section of the Process Engineering Department in Rabigh Refining & Petrochemical Company.

"We are very pleased that Aramco and Sumitomo Chemical have selected Axens as their partner, and we are looking forward to contributing to the success of AFA technology with our expertise in this area. We are glad to assist in achieving this milestone, which is a stepping stone to further commercialization of the AlphaButol technology in the coming years," said Axens’ Chairman and CEO Jean Sentenac.

As per MRC, Saudi Aramco said it restructured its debt financing for Sadara Chemical Company, its joint venture (JV) with Dow Chemical, an American petrochemical major. The Saudi national oil company also said an agreement had been reached to allocate more natural gas feedstock to the joint venture, which has been building the world’s biggest chemical complex ever delivered in a single phase, in Jubail. Saudi Aramco and Dow have agreed to guarantee up to an aggregate of USD3.7 billion of senior debt principal in proportion to their ownership interests in Sadara, Aramco said in a stock exchange filing.

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.

Saudi Aramco, officially the Saudi Arabian Oil Company, is a Saudi Arabian national oil and natural gas company based in Dhahran, Saudi Arabia. Saudi Aramco's value has been estimated at up to USD10 trillion in the Financial Times, making it the world"s most valuable company. Saudi Aramco has both the largest proven crude oil reserves, at more than 260 billion barrels, and largest daily oil production.
MRC

MOSCOW (MRC) - Blagoveshchensk Polief has installed all 10,080 photovoltaic modules of the future solar power plant (SPP), the company said.

Now work is underway to connect the modules to inverters and work has begun on the installation of a transformer substation. "The completion of the installation of photovoltaic modules of the solar power plant is the next and most noticeable step towards the implementation of the project. Eight hectares of solar panels can be seen even from space. And space technologies themselves are already coming into our life - from the attributes of satellites and orbital stations, becoming part of the equipment of modern enterprises all over the world. Implementation of such innovative projects contributes to the improvement of environmental friendliness and efficiency of production ", - said General Director of Polief Evgeny Semenko.

The design capacity of the power plant will be about 4.9 MW, which is 7.1% of the capacity of all operating solar power plants in the Republic of Bashkortostan. The readiness of the facility at this stage of construction has reached 80%.

The project will significantly increase the share of "green" electricity in the energy balance of the enterprise and reduce the carbon footprint of production. Investments in the project will amount to over 250 million rubles. It is planned to complete the construction of the solar power plant and integrate it into the energy supply chain of the enterprise in early 2022.

Earlier it was reported that Polief continues to implement the project to launch the production of "green" PET pellets containing secondary raw materials. The enterprise loaded the first pile into the base of the production foundation. It is planned to launch the line in the first half of 2022. The production of PET with recycled content is an important part of SIBUR's sustainable development strategy until 2025. The technology that is planned to be used at Polief is environmentally friendly and belongs to the advanced methods of involving recycled PET in the production cycle.

According to MRC's ScanPlast, the estimated PET consumption in Russia in October of this year increased by 17% compared to the previous year and amounted to 67,970 tonnes against 58,030 tonnes in October 2020. According to the results of ten months of 2021, 661,830 tonnes of PET were processed in the Russian Federation, which is 13% more than the same indicator last year.

Polyef is the largest producer of terephthalic acid (TPA) and polyethylene terephthalate (PET) in Russia (raw material for polymer food packaging). The TPA production capacity is 350 thousand tons per year, PET - 219 thousand tons SIBUR owns 100% of the company's shares.

PJSC SIBUR Holding is the largest petrochemical company in Russia and Eastern Europe with full coverage of the industry cycle from gas processing, production of monomers, plastics and synthetic rubbers to plastics processing.
MRC

1. Oil prices grow on easing Omicron coronavirus variant fears and Iranian crude delay

MOSCOW (MRC) -- Oil prices rose nearly USD2 on Tuesday, extending the previous day's almost 5% rebound as concerns over the impact of the Omicron coronavirus variant on global fuel demand eased and Iran nuclear talks stalled, delaying the return of Iranian crude, reported Reuters. Brent crude futures were up USD1.67, or 2.3%, at USD75.75 a barrel by 1323 GMT, having registered a 4.6% gain on Monday. US West Texas Intermediate crude was up USD1.90, or 2.7%, at USD71.39, building on a 4.9% gain in the previous session. Oil prices were pummelled last week by concerns that vaccines might be less effective against the Omicron variant, sparking fears that governments could impose fresh restrictions to curb its spread and hit global growth and oil demand.

MRC