Friday, May 8, 2020
Energy Petrochemicals and Plastics 63
1 U.S. drillers expected to slash oil & gas rigs to lowest ever
https://www.reuters.com/article/us-usa-rigs-baker-hughes-idUSKBN22K0IL
The number of oil and gas rigs operating in the United States is expected to hit an all-time low this week – reflecting data going back 80 years – as the energy industry slashes output and spending to deal with the coronavirus-led crash in fuel demand.
2 Oil Up as Market Starts to Rebalance
https://www.rigzone.com/news/wire/oil_up_as_market_starts_to_rebalance-08-may-2020-162026-article/
Oil headed for its first back-to-back weekly gain since February as output cuts from the biggest producers and a nascent recovery in demand began to rebalance a market awash with crude.
Futures in New York rose toward $25 a barrel on Friday and are up around 24% so far this week. Saudi Arabia, the world’s largest oil exporter, raised the cost of almost all grades for June, suggesting it’s more interested in supporting a recovery in prices than winning market share.
3 Covid-19 demand update: Oil seen down 10.9%, jet fuel down 33.6%, road fuel down 11.1% in 2020
https://www.rystadenergy.com/newsevents/news/press-releases/covid-19-demand-update-oil-seen-down-10point9-jet-fuel-down-33point6-road-fuel-down-11point1-in-2020/
In another consecutive revision of our weekly estimates, our newest forecast for oil demand now projects a decrease of 10.9% for 2020, or 10.8 million barrels per day (bpd) year-over-year. Our estimates show that total oil demand in 2019 was approximately 99.5 million bpd, which is now projected to decline to 88.7 million bpd in 2020. To put the number into context, last week we projected a decrease to 88.8 million bpd.
3 Why This Oil Rally Won’t Last
https://oilprice.com/Energy/Oil-Prices/Why-This-Oil-Rally-Wont-Last23477.html
Oil prices have rallied as traders believe the depths of demand destruction may be coming to an end with economies beginning to reopen. But some analysts are warning that the oil price rally may be premature.
“We believe that the current euphoria on the oil market is premature,” Commerzbank warned. Pointing to the December WTI contract rallying to $33 per barrel on Tuesday, the investment bank said there is limited upside from here.
4 Weekly Resin Report: Producers Reduce Output to Combat Over-Supply, Sliding Prices
https://www.plasticstoday.com/resin-pricing/weekly-resin-report-producers-reduce-output-combat-over-supply-sliding-prices/2135829262962
Spot resin trading was mixed last week. Polyethylene (PE) business improved but was offset by slower polypropylene (PP) sales. Overall spot prices ended mostly steady, though there was deep producer discounting along the way to help improve month-end sales. It remains to be seen if one-off deal levels will return in May, reports the PlasticsExchange in its Market Update.
5 Asian spot LNG prices recover a little on improving demand
https://www.reuters.com/article/us-global-lng-idUSKBN22K104
The average LNG price for June delivery into northeast Asia rose to an estimated $2 per million British thermal units (mmBtu) this week, up 20 cents from the previous week, traders said.
That followed three straight weeks of decline.
While lockdowns are easing in some markets, such as in China and South Korea, containment policies elsewhere are hampering their manufacturing exports and dragging on recoveries.
6 DuPont Throttling Back Plastics Production by Close to 50%
https://www.ptonline.com/news/dupont-throttling-back-plastics-production-by-close-to-50
In preparation for further downslides in industries such as automotive, aerospace, oil & gas and construction, DuPont to reduce plastics production capacity.
In announcing its first quarter 2020 financial results in the first week of May, DuPont, Wilmington, Del., confirmed that it was temporarily shutting down close to 50% of its plastics production. This in anticipation of further downslides in key industries such as automotive (which accounts for about 15% of the company’s sales), aerospace, gas & oil, and construction.
7 Did The Plastics Boom End Before It Even Started?
https://oilprice.com/Energy/Energy-General/Did-The-Plastics-Boom-End-Before-It-Even-Started.html
Three years ago, the UN declared plastic pollution a global crisis, more than three decades after the discovery of the Great Pacific Garbage Patch–a collection of marine debris 2x the size of Texas. The Year 2020 was supposed to be a watershed moment for the plastic industry after dozens of state and local policymakers planned to make the ultimate shift away from plastics. They clearly underestimated the sheer tenacity of the plucky industry and a global pandemic.
8 Coronavirus, oil price crash – impact on chemicals
https://www.icis.com/explore/resources/news/2020/05/08/10462108/topic-page-coronavirus-oil-price-crash-impact-on-chemicals
Shares of petrochemical firms in Asia traded higher on Friday, taking the cue from gains in global crude futures on hopes that demand would pick up amid easing lockdown measures.
In the isopropanol (IPA) market, demand in southeast Asia fell for the first time since mid-March given competition posed by an influx of ethanol in some countries.
9 U.S. motorists start returning to the road
https://www.reuters.com/article/us-oil-prices-kemp-idUSKBN22J1WC
U.S. gasoline consumption has started to increase in a sign motorists are starting to use their cars more as the economic lockdown eases.
Fuel consumption data show an economy that had adjusted to an exceptional economic shock by the middle of April and demonstrated some signs of improving in the second half of the month.
The volume of gasoline supplied to the domestic market rose to almost 6.7 million barrels per day (bpd) last week, according to estimates prepared by the U.S. Energy Information Administration.
10 Ships storing oil at sea supporting crude tanker market: Euronav CEO
https://www.reuters.com/article/us-shipping-tankers-euronav-idUSKBN22J19B
Over 100 tankers are estimated to be storing tens of millions of barrels of crude oil at sea, bolstering prospects for players in the sector, the chief executive of leading tanker group Euronav said on Thursday.
The world continues to struggle with an oil glut due to a drop in demand caused by the coronavirus even after top oil countries have cut production.
Hugo De Stoop, CEO of Belgian group Euronav, said floating storage was “more likely to increase than to decrease”.
11 Enbridge converts idled Mainline export system pipeline for crude storage
https://www.canadianmanufacturing.com/manufacturing/enbridge-converts-idled-mainline-export-system-pipeline-for-crude-storage-252910/
Analysts say an Enbridge Inc. plan to use an idled leg of its Mainline pipeline system to store surplus Western Canadian oil will help offset lower volumes on the system as US refineries buy less oil to match lower demand.
Enbridge has applied to the Canada Energy Regulator for permission to use a portion of its Line 3 pipeline in Saskatchewan and Manitoba to store about 900,000 barrels of oil starting June 1.
12 Undercutting rivals helps Saudis grow share in key oil markets
https://www.worldoil.com/news/2020/5/6/undercutting-rivals-helps-saudis-grow-share-in-key-oil-markets
Saudi Arabia, the world’s biggest exporter, appears to be winning the fight for sales as it slashes prices for its crude. Producers globally are struggling to retain customers as the coronavirus destroys demand for fuel. After flooding the market in April, producers are now scaling back shipments as part of the deal by OPEC+ suppliers to soak up the glut in oil.
13 Why Russia Finally Accepted Deeper Oil Output Cuts
https://oilprice.com/Energy/Crude-Oil/Why-Russia-Finally-Accepted-Deeper-Oil-Output-Cuts.html
When Russia refused two months ago to join the deeper OPEC oil cuts, it was because Moscow found them unnecessary. Two months later, Russia agreed to cut quite a bit more than it was asked to at the ill-fated March meeting. It is now doing its best to achieve its promised cuts. Why? Because it has the motivation that it lacked two months ago.
14 Americas: The week ahead in petrochemicals
https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/050420-americas-the-week-ahead-in-petrochemicals
AROMATICS: Aromatics prices were expected to continue moving in conjunction with energy markers this week amid contracting supply associated with lower refinery utilization rates.
Toluene demand was expected to remain largely confined to commercial-grade material this week as blend values remain soft. Demand from the chemical segment was expected to be limited amid poor STDP margins. Mixed xylenes are likely to remain firm as limited availability offset weak demand from the paraxylene segment. Paraxylene was expected to remain soft amid poor economics from crystallization units.
15 What Does A Stalling Auto Sector Mean For Polymer Markets?
https://www.woodmac.com/news/opinion/what-does-a-stalling-auto-sector-mean-for-polymer-markets/
Sales have seen even steeper falls. This is not surprising – people can’t start or complete the process of buying a car when showrooms were closed, and the threat of recession will further influence consumer behaviour. In the first month of lockdown, car sales declined by between 70-90% in countries such as China, Italy and France.
