Oil prices up amid OPEC+ supply cut uncertainty

MOSCOW (MRC) -- Oil prices ticked up on Friday as the market weighed conflicting messages on supply from Russia and Saudi Arabia ahead of the next OPEC+ policy meeting, said Hydrocarbonprocessing.

Brent crude was up 77 cents, or 1%, at USD77.03 a barrel at 1342 GMT, while U.S. West Texas Intermediate rose 96 cents, or 1.3%, to USD72.79 a barrel.

Benchmarks had settled more than USD2 per barrel lower on Thursday after Russian Deputy Prime Minister Alexander Novak played down the prospect of further OPEC+ production cuts at its meeting in Vienna on June 4.

Both prices were still poised to post a second week of gains. A deal to raise the U.S. debt ceiling, which appears in sight, would likely boost oil prices.

Russian President Vladimir Putin said on Wednesday that energy prices were approaching "economically justified" levels, also indicating there could be no immediate change to OPEC+'s production policy.

The Russian remarks contrasted with comments this week from Saudi Arabian Energy Minister Prince Abdulaziz bin Salman, the de-facto leader of the Organization of Petroleum Exporting Countries (OPEC), warning short sellers to "watch out".

Some investors interpreted that as a signal OPEC+ could consider further output cuts. Worries of weaker-than-expected demand growth globally capped gains ahead of an expected rise in oil demand in the second half of the year, especially from China.

Meanwhile, bets on falling oil prices are on the rise. The dollar has strengthened this month against a basket of major peers, making dollar-denominated commodities such as oil more expensive for those holding other currencies.

We remind, oil prices gained on Wednesday after U.S. oil and fuel supplies tightened and as a warning from the Saudi energy minister to speculators raised the prospect of further OPEC+ output cuts. Brent crude futures rose 86 cents, or 1.1%, to USD77.70 a barrel by 0007 GMT, while the U.S. West Texas Intermediate crude (WTI) gained 88 cents, or 1.2%, to USD73.79 a barrel. Industry data late Tuesday showed U.S. crude oil and fuel inventories fell sharply.

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MOSCOW (MRC) -- Iran's Arvand Petrochemical will begin building a second polyvinyl chloride (PVC) unit in Mahshahr, with a similar capacity and technology as its first 240,000 tonnes/y PVC plant, said Cnbc.

An expected completion date was not given.

Earlier it was reported, the construction of a polyvinyl chloride (PVC) unit, with a production capacity of 300,000 tons a year, at the Arvand Petrochemical Company in Mahshahr, Khuzestan Province, is making headway, managing director of the company said. “When the unit becomes fully operational in about two years, the plant’s current production capacity of PVC at 320,000 tons will almost double,” Mohammad Reza Karimi was also quoted as saying by the National Petrochemical Company's news website Nipna.

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MOSCOW (MRC) -- ConocoPhillips said on Friday it was buying the 50% stake in the Surmont oil facility held by TotalEnergies' Canadian subsidiary for about USD3 B, giving it full ownership and elbowing away rival Suncor Energy, said Hydrocarbonprocessing.

Canada's Alberta oil sands hold some of the world's largest crude reserves, which appeal to cash-flush producers looking to bolster production.

Suncor last month agreed to buy TotalEnergies’ Canadian operations for USD4.11 B, including Total's 50% stake in Surmont, which ConocoPhillips operates.

But ConocoPhillips, which held the other 50% stake, held right of first refusal to buy the rest of Surmont. Conoco's decision to exercise that right is a setback to Suncor's plans to boost its long-term bitumen supplies to replace its aging Base Mine.

Suncor, in a statement, said its deal with Total was conditional on ConocoPhillips waiving its right of first refusal, and it is now re-assessing the transaction. Conoco's pending decision had stirred speculation about whether it would exercise its option, but investors seemed to favor buying Surmont, given its returns, RBC Capital Markets said in a note.

Conoco shares eased, while Suncor stock was down 1.3%. ConocoPhillips expects the transaction to add about $600 MM of annual free cash flow in 2024.

The deal, expected to close in the second half of 2023, will be funded either through cash, short- and medium-term financing, or a combination, ConocoPhillips said.

We remind, ConocoPhillips posted significantly lower earnings in 1Q 2023 than in 1Q 2022 because because of declining oil prices, but still surpassed analysts' projections. The US firm announced a net profit of USD2.9 bn, a decline from USD5.8 bn in 1Q 2022. Earnings stood at USD2.38/share, an increase from USD4.39/share in 1Q 2022.


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MOSCOW (MRC) -- Synthetic rubber producer Arlanxeo, which is wholly owned by state-owned energy firm Aramco, has announced the planned construction of a world-class rubber facility in Jubail, Saudi Arabia, said Rubberjournalasia.

The 140 kiloton-per-annum (ktpa) plant will produce two high performance elastomers: Ultra High cis Polybutadiene (NdBR) and Lithium Butadiene Rubber (LiBR). The planned construction follows the final investment decision by Aramco and TotalEnergies to build a world scale petrochemical facility in Saudi Arabia (the Amiral complex).

Engineering, procurement, and construction contracts are scheduled to be awarded in the second half of 2023, with construction expected to commence in 2024, followed by commercial operations in 2027.

NdBR is predominately used in high performance tyres, particularly in the tread area, due to its proven ability to improve fuel economy, influence grip and increase tire durability. NdBR is part of Arlanxeo’s sustainability drive. LiBR is mainly used for plastic modification applications to improve the impact resistance of products such as those used in the food packaging and household appliances industry.

Olivier Thorel, Chairman of Arlanxeo’s Shareholders’ Committee and Senior Vice President of Chemicals at Aramco, said: “The planned construction of a 140 ktpa rubber plant in Saudi Arabia, integrated within Satorp’s butadiene facility, underscores ARLANXEO’s drive to grow in a competitive market. With ARLANXEO’s unparalleled expertise in developing, producing and marketing high-performance synthetic rubbers, the strategic rationale for the Project is clear and compelling.”

CEO Arlanxeo, Donald Chen, said: “Arlanxeo is delighted to announce the planned expansion of its asset base to Saudi Arabia. The project is an important part of our growth plans and is expected to reinforce Arlanxeo’s leadership position in high performance rubbers. This is the start of an exciting chapter for Arlanxeo and our employees, and we look forward to supplying our customers with reliable rubber from a world-class and highly competitive asset."

We remind, Arlanxeo (Maastricht, the Netherlands) announced the opening of a new polybutadiene (BR) production line in Brazil. The new production line supplements Arlanxeo’s existing production capacity in Brazil with an additional 65,000 metric tons per year (m.t./yr), and reinforces the company’s commitment to meeting customer demand for reliable, locally produced BR in Latin America.

Arlanxeo develops, produces and markets high-performance rubbers with a presence at more than 12 production sites in 9 countries and 7 innovation centres around the world. Its products are used in a wide range of applications: from the automotive and tyre industries to the electrical, construction, and oil and gas industries.

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MOSCOW (MRC) -- WACKER has completed the capacity expansion measures for the produc-tion of vinyl-acetate-ethylene copolymer (VAE) dispersions and VAE dispersible polymer powders at WACKER’s Nanjing site in China, said the company.

“China is the world’s largest construction market, covering about 20 percent of global construction expenditure. Our VAE dispersions and dispersible powders enable us to supply the growing construction market in China with binders for various applications such as ceramic tile adhesives, waterproofing membranes or carpets. This capacity expansion in Nanjing strengthens our position as the global leader for vinyl-acetate-ethylene dispersions and polymer powders“, noted Christian Hartel, CEO of Wacker Chemie AG. What is more, China is already one of the world’s most important adhesive markets. “Our new plant is close to our customers, thereby supporting their growth even more effectively”, added Peter Summo, who heads the WACKER POLYMERS business division.

During the inauguration ceremony, Alvin Hu, President of WACKER China, stated that the expansion demonstrated WACKER’s strong focus on the market in China. “The capacity expansion project at the Nanjing site is a milestone for WACKER China. With the expansion, we have at the same time reserved sufficient space for subsequent production lines, allowing for the rapid construction of future expansion projects. It will not only meet increasing customer demand in China, but also provide WACKER with sufficient capacity for its long-term development in the region.”

WACKER’s Nanjing expansion corresponds to a total investment of more than US$ 100 million. The new production facilities more than double the annual capacity of VAE dispersions and VAE dispersible polymer powders on site. The VAE dispersions project is designed around an advanced dispersion-polymerization process and a safety control system that meets high standards, making the entire process cutting edge in this field. The new production line for VAE dispersible polymer powders adopts advanced spray-drying technology and features an advanced process control system (APC). The two new plants are the largest of their kind in the world. The Nanjing site is one of four production sites WACKER POLYMERS operates globally.

WACKER’s Nanjing expansion was launched at the end of 2020 and successfully completed after overcoming various challenges posed by the Corona pandemic during construction. Nearly two hundred guests attended the inauguration event, including government representatives, customers, and distributors.

We remind, WACKER chemical group headquartered in Munich, Germany, has acquired 100% of the shares of contract manufacturing company (CMO) ADL BioPharma. The shares were purchased from Kartesia, a financial investor with whom Wacker signed a corresponding agreement finalizing the transaction last week. Following Wacker's purchase of fermentation assets in the northern Spanish city of Leon in 2016, the chemical group now owns the entire site.

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