Friday, May 15, 2020
Energy Petrochemicals and Plastics 64
1 Has Demand For Oil Already Peaked?
https://oilprice.com/Energy/Crude-Oil/Has-Demand-For-Oil-Already-Peaked.html
In fact, some are wondering whether the world will ever get back to 100 mb/d of oil demand. Even oil executives have their doubts. Royal Dutch Shell’s CEO Ben van Beurden recently suggested that a rebound is unlikely, even looking out beyond 2020. “We do not expect a recovery of oil prices or demand for our products in the medium term,” he said.
2 Oil Price Fundamental Daily Forecast – Gains Extended Amid Signs of China Demand Pickup
https://www.fxempire.com/forecasts/article/oil-price-fundamental-daily-forecast-gains-extended-amid-signs-of-china-demand-pickup-649463
Prices have ticked up in the past two weeks as some countries relaxed coronavirus restrictions and lockdowns to allow factories and shops to reopen. U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading higher on Friday, while breaking out of a seven-day trading range.
3 Natural Gas Price Fundamental Daily Forecast
https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-technical-factors-underpinning-prices-649469
Natural gas futures are edging higher on Friday, supported by technical buying due to oversold conditions, and a government storage report that fell slightly short of expectations. Spot prices, however, remained negative across most of the country with Natural Gas Intelligence’s (NGI) National Average down 6.5 cents to $1.415.
4 Weekly Resin Report: Market May Have Hit Bottom, for Now, as PE, PP Prices Record Slight Uptick
https://www.plasticstoday.com/resin-pricing/weekly-resin-report-market-may-have-hit-bottom-now-pe-pp-prices-record-slight-uptick/208657181963009
The spotty reopening of the larger economy has trickled down to the spot resin market, as buyers began to return in anticipation of firing up processing facilities that had been shuttered. The supply situation has also tightened significantly: Producers have reduced reactor rates, slowing their resin output while aggressively liquidating surplus resin to eager international buyers, mostly in the far east, reports the PlasticsExchange in its Market Update. Recovering crude oil and feedstock costs also contributed to improved market sentiment and together translated to a $0.01/lb spot increase for most commodity-grade polyethylene (PE) and polypropylene (PP) resins last week
5 ICIS global petrochemical index plunges
https://www.hydrocarbonengineering.com/petrochemicals/12052020/icis-global-petrochemical-index-plunges/
The global index stands at a level last seen in November 2003 and is just below that in January 2009.
Each of the regional components of the global index fell sharply month on month as petrochemical and plastic prices fell across the board. The index charts the largely contract and average monthly price movements of a basket of the 12 major petrochemicals and plastics.
6 Petrochemical sector braced for uncertainty
https://www.hydrocarbonengineering.com/petrochemicals/11052020/petrochemical-sector-braced-for-uncertainty/
The impact of the coronavirus lockdowns on the oil, gas and chemicals industries’ integrated value chains is radically shifting relationships and profitability, according to Nigel Davies, Insights Editor, ICIS.
It is also making planning virtually impossible, as BASF suggested last week.
The environment around refining and chemical margins remains challenging, Shell CEO Ben van Beurden also said this week.
7 Taps closing! US shut-ins to reach at least 2 million bpd in June as oil producers walk the walk
https://www.rystadenergy.com/newsevents/news/press-releases/taps-closing-us-shut-ins-to-reach-at-least-2-million-bpd-in-June-as-oil-producers-walk-the-walk/
US oil producers have been expected for some time to have to shut down oil production as a result of the Covid-19 pandemic, but they were initially slow to move. Now that profitability and storage limitations have started to hurt, the curtailment wave has accelerated. A Rystad Energy analysis shows that gross US cuts could reach at least 2 million barrels per day (bpd) in June, including liquids.
8 Global oil refining could rebound in June, but margins weak: IEA
https://www.reuters.com/article/us-global-oil-refining-idUSKBN22Q2A5
Global oil refining production could start rebounding in June, the International Energy Agency said on Thursday, but refiners’ margins may be squeezed due to rising crude prices as producers slashed output much faster than expected.
Refiners throttled back output globally as the coronavirus pandemic sent billions of people into lockdown and cut fuel demand by 30%. Crude prices crashed, prompting the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, agreed to cut oil output by 9.7 million barrels per day (bpd), while other nations have also reduced output.
9 ‘Early signs’ of crude market rebalancing, petchems to gain long term – IEA chief
https://www.icis.com/explore/resources/news/2020/05/14/10507423/early-signs-of-crude-market-rebalancing-petchems-to-gain-long-term-iea-chief
Some petrochemicals end markets like those for medical equipment and disinfectants have staged a revival during the coronavirus pandemic, a trend that is likely to stay in the long term, said Fatih Birol.
“I wouldn’t think the petchems industry will be so badly affected [in the long term] as other sectors of the oil consuming sectors,” he said, speaking to reporters in Paris.
10 U.S. ethane-based petrochemical plants challenged by low crude prices
https://www.bicmagazine.com/industry/refining-petchem/pu-u-s-ethane-based-petrochemical-plants-challenged-by-low-c/
The Covid-19 pandemic turned the table for U.S. petrochemical companies that saw cost advantages erode for their ethane crackers in relation to those that use naphtha as feedstock, as reported by Petrochemical Update.
Plunging oil prices in 2020 turned things around for U.S. crackers that were built to use ethane as feedstock in what seemed until recently a sure bet to produce the world’s lowest-cost ethylene.
11 Oil Up on Supply Cuts and Demand Recovery
https://www.rigzone.com/news/wire/oil_up_on_supply_cuts_and_demand_recovery-15-may-2020-162102-article/
Futures in New York are up about 14% this week after closing above $27 a barrel on Thursday for the first time in over a month. China’s industrial output increased in April for the first time since the outbreak, signaling economic recovery aided by government stimulus efforts. Meanwhile, Saudi Arabia has slashed supply to its customers in the U.S., Europe and Asia as OPEC and its allies reduce production by almost 10 million barrels a day.
12 EIA expects lower natural gas production in 2020
https://www.eia.gov/todayinenergy/detail.php?id=43755
In its May 2020 Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecasts that U.S. marketed natural gas production will decrease by 5% in 2020 because of a weakening economic outlook from the impact of efforts to reduce the spread of the 2019 novel coronavirus disease (COVID-19). EIA expects U.S. marketed natural gas production to average 94.3 billion cubic feet per day (Bcf/d) in 2020, down from 99.2 Bcf/d in 2019.
13 U.S.-bound Saudi oil could hurt prices and disrupt stabilizing markets
https://www.worldoil.com/news/2020/5/15/us-bound-saudi-oil-could-hurt-prices-and-disrupt-stabilizing-markets
Over 30 tankers laden are set to arrive in the U.S. Gulf Coast and West Coast during May and June, according to ship tracking data compiled by Bloomberg. The more than 50 million barrels of Saudi crude on the water threaten to disrupt a positive supply development: U.S. crude stockpiles declined for the first time since January and inventories at the Cushing, Oklahoma storage hub contracted by the most in months.
14 China attracts petrochemical exports as global demand sags; inventories rising
https://www.icis.com/explore/resources/news/2020/05/14/10507205/insight-china-attracts-petrochemical-exports-as-global-demand-sags-inventories-rising
China’s petrochemical industry faces yet another challenge – rising inventories and congestion at ports – as global supply far exceeds demand with the country’s own exports hit hard by the fallout of the coronavirus pandemic.
Demand for finished goods from two of China’s traditional export destinations, the US and Europe, has shrunk as their wilted economies are slowly trying to recover.
15 Global auto sales slump, steel price weaken on lockdowns
https://blogs.platts.com/2020/05/14/global-autos-steel-coil-prices-coronavirus-lockdown/
Vehicle markets saw their first quarter performance take a beating, with existing weak demand pummeled by the coronavirus pandemic as countries around the world reacted by going into lockdown.
GM suspended its 2020 profit outlook amid the uncertainty, after it added $16 billion to its cash reserves by tapping its credit lines.
16 Production of graphite, lithium and cobalt
https://www.argusmedia.com/pages/NewsBody.aspx?id=2105669&menu=yes
Production of graphite, lithium and cobalt may need to rise by nearly 500pc by 2050 from 2018 levels to meet demand from energy storage technologies in the clean energy transition, the World Bank said.
But these minor metals, which a new World Bank report terms concentrated minerals, are needed for just one or two technologies and so possess higher demand uncertainty, given technological disruption and deployment could significantly impact their demand.
17 Sibur’s Q1 earnings hurt by pandemic, partial gains from Zapsibneftekhim output
https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/051520-siburs-q1-earnings-hurt-by-pandemic-partial-gains-from-zapsibneftekhim-output
The company’s Q1 polypropylene sales rose by 87.3% to 243,000 mt and polyethylene sales increased by more than 100% to 132,000 mt.
Sibur said its new Zapsibneftekhim facility in Tobolsk, Russia — having completed its start up and commissioning works — also contributed in the reduction of LPG sales by the company by 29.9% to 1 million mt. The naphtha levels remained steady at 298,000 mt in Q1 compared to the same time period in 2019.
18 How Accurate Are EIA And API Inventory Reports?
https://oilprice.com/Energy/Crude-Oil/How-Accurate-Are-EIA-And-API-Inventory-Reports.html
Oil markets have had yet another confusing week, this time not just because of the coronavirus and all the media attention that has garnered. But this week, disparate crude oil inventory data from the Energy Information Administration (EIA) and American Petroleum Institute (API) left traders wondering which set of inventory change data–which is supposed to be representative of the balance between supply and demand–was “the right data”.
19 Too much LNG: Here are the producers better positioned to cut output as Covid-19 erases profits
https://www.rystadenergy.com/newsevents/news/press-releases/too-much-lng-here-are-the-producers-better-positioned-to-cut-output-as-covid-19-erases-profits/
As global liquefied natural gas (LNG) benchmark prices continue to fall due to oversupply on account of Covid-19, LNG producers with short-run marginal costs (SMRCs) that exceed spot prices are increasingly looking to curtail production.
A Rystad Energy analysis finds that those best positioned to reduce volumes while suffering the least possible financial damage are APAC LNG terminals, specifically the Eastern Australia projects and NWS LNG, plus some US plants that have been operational for a longer period of time such as Sabine Pass and Cove Point.
20 U.S. commodities watchdog issues blunt warning over oil volatility
https://www.reuters.com/article/us-global-oil-cftc-letter-kemp-idUSKBN22Q222
The U.S. Commodity Futures Trading Commission (CFTC) has written to exchanges, brokers and clearers in unusually forthright terms to remind them of their obligation to ensure orderly trading and commodity pricing.
The CFTC’s letter, sent on Wednesday, was issued in the wake of unusually high volatility and negative prices in the light sweet crude oil futures contract (WTI) for delivery in May on the penultimate day of trading last month.
21 Supermajors’ first quarter earnings were bad, and will likely get worse
https://www.worldoil.com/news/2020/5/11/supermajors-first-quarter-earnings-were-bad-and-will-likely-get-worse
Big Oil’s generous dividends have long been its main attraction to investors. But thanks to Shell Chief Executive Officer Ben van Beurden they are no longer sacrosanct, after he slashed his company’s payout by two thirds.
“No CEO wants to have on their track record a cut to the dividend,” van Beurden told reporters, after doing just that. Now the taboo is broken, others may follow.
