Friday, May 1, 2020
Energy Petrochemicals and Plastics 62
1 Oil Price Fundamental Daily Forecast – Slight Rise Suggests Optimism as OPEC+ Output Cuts Begin
https://www.fxempire.com/forecasts/article/oil-price-fundamental-daily-forecast-slight-rise-suggests-optimism-as-opec-output-cuts-begin-646929
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are up for a third straight session on Friday as major producers began output cuts to offset a slump in fuel demand triggered by the coronavirus pandemic while data showed U.S. crude inventories grew less than expected. Futures are now within striking distance of the close on April 20 which is the day before the steep plunge that saw nearby May futures plunging into negative territory for the first time in history.
2 Natural Gas Price Fundamental Daily Forecast – Upside Momentum is Builiding; $1.828
https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-upside-momentum-is-builiding-1-828-1-786-key-support-646927
The natural gas market continued to confound traders with another unexpected rally on Thursday after a government report showed a lower-than-expected storage build.
“Despite the low gas price environment, erratic price moves have been prevalent given all of the uncertainties surrounding the coronavirus and the oil market downturn. There are some positive drivers for natural gas, with Lower 48 production well off late-November highs and more cuts ahead,” Natural Gas Intelligence (NGI) said late Thursday.
3 Weekly Resin Report: Eroding Demand and Epic Plunge in Oil Prices May Lead to Rationing of Resin Production
https://www.plasticstoday.com/resin-pricing/weekly-resin-report-eroding-demand-and-epic-plunge-oil-prices-may-lead-rationing-resin-production/51681784162921
Prices for all commodity grade resins continued to slide and most polyethylene (PE) and polypropylene (PP) materials peeled off another penny. The beginning of May will mark the first instances of states re-opening their economies and we are all optimistic that we can quickly get back to business as usual and move past this disruptive world event, said the PlasticsExchange. Until then, the reseller community as a whole will continue to grind this out and try to move its high-cost inventory with minimal loss. It is a delicate dance in this very competitive arena, as fresh railcar offers are well-discounted, while material for immediate shipment maintains an eroding premium.
4 Wood Mac: European olefins production could recover in 2020 despite coronavirus
https://www.britishplastics.co.uk/materials/wood-mac-reports-european-olefins-production-could-recover-i/
Where Europe saw a 20-year low in olefins production in 2019, market research analyst, Wood Mackenzie, says 2020 could show a recovery, despite Coronavirus.
This, it says, is primarily due to lighter turnaround schedules and competitive naphtha prices making Europe’s steam cracker fleet more competitive.
5 A trillion dollars! This is by how much global E&P revenues will fall in 2020 due to Covid-19
https://www.rystadenergy.com/newsevents/news/press-releases/a-trillion-dollars-this-is-by-how-much-global-ep-revenues-will-fall-in-2020-due-to-covid-19/
The devastating effect of the Covid-19 pandemic on global oil and gas exploration and production (E&P) companies is better understood by looking at the industry’s expected total annual revenues for 2020. A Rystad Energy analysis shows that global E&P revenues are now forecasted to fall by about $1 trillion in 2020, a drop of 40% to $1.47 trillion from last year’s $2.47 trillion.
6 Coronavirus lockdowns depress fuel demand worldwide
https://www.reuters.com/article/us-global-oil-demand-fuels-factbox-idUSKBN22D5CT
Countries around the world have reported steep falls in fuel demand as lockdowns to contain the spread of the novel coronavirus limit the movement of more than 4 billion people.
7 Oil rises towards $27 as OPEC+ begins record cut
https://www.reuters.com/article/us-global-oil-idUSKBN22D43L
Oil rose towards $27 a barrel on Friday as OPEC and its allies began a record output cut to tackle a supply glut weighing on the market due to the coronavirus crisis.
8 The Wave Of Shale Well Closures Has Finally Begun
https://oilprice.com/Energy/Crude-Oil/The-Wave-Of-Shale-Well-Closures-Has-Finally-Begun.html
U.S. shale oil producers have so far held up admirably, hanging on for dear life amidst the biggest oil demand collapse in history. American producers continued to pump at record highs in March, even after dozens of drillers laid out blueprints to limit production.
But with U.S. storage about to hit tank tops in a matter of weeks and the world deep in the throes of the biggest pandemic in modern history, the inevitable has begun to unfold: The arduous and costly process of well shut-ins.
9 Opec+ alliance to reduce output by 9.7mn b/d
https://www.argusmedia.com/pages/NewsBody.aspx?id=2101627&menu=yes
Opec and its partners are today embarking on the most ambitious co-ordinated production cut in history.
The first phase of the three-stage deal targeting market rebalance calls for the 23-country Opec+ alliance to reduce output by 9.7mn b/d this month and next, largely from an October 2018 baseline. Iran, Venezuela and Libya remain exempt.
10 Oil Up as Cuts Start
https://www.rigzone.com/news/wire/oil_up_as_cuts_start-01-may-2020-161948-article/
Oil headed for its first weekly gain in a month as global production cuts began to take effect, while early signs the coronavirus-driven plunge in demand might be starting to bottom out also aided sentiment.
Futures in New York edged above $19 a barrel and are up around 13% so far this week. The OPEC+ bloc’s 10 million barrels a day of output reductions officially start from Friday, while other producers — including Norway and ConocoPhillips — have also said they’re cutting back.
11 LNG tankers build up around virus-hit Europe as crisis abates in Asia – Energy & Oil
https://af.reuters.com/article/energyOilNews/idAFL8N2CI9K4
Liquefied natural gas (LNG) cargoes are piling up off the shores of Europe as the coronavirus pandemic severely disrupts gas demand, leading to delays in tanker discharges and a rise in the number of vessels used as floating storage, analysts said.
12 Dow Chemical idles polyethylene plant in Argentina
https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/043020-dow-chemical-idles-polyethylene-plant-in-argentina
To balance production to current demand, Dow said it is idling three PE and two elastomers production units in the Americas for at least 30 days. The company did not say when the plants would be idled.
“The plants have an aggregate annualized capacity of approximately 2 million lb and are located on the US Gulf Coast and in Argentina,” CEO Jim Fitterling said during the company’s first-quarter 2020 earnings call Thursday.
13 BASF cuts investment plans as crisis consumes car industry
https://www.reuters.com/article/us-basf-results-idUSKBN22C0N7
BASF (BASFn.DE) scaled back its investment budget on Thursday and said it could not rule out a second quarter operating loss as the coronavirus crisis hit automakers, who are the chemicals giant’s largest customers.
Profits in the chemicals industry react strongly to a downturn because of its exposure to cyclical sectors such as carmakers, while massive overheads prevent swift cost cutting.
14 BASF Starts Hand Sanitizer Production In Canada
https://www.chemicalprocessing.com/industrynews/2020/basf-starts-hand-sanitizer-production-in-canada/
With the goal of helping overcome current and future bottlenecks for hand sanitizer resulting from a significant increase in demand, BASF starts production of hand sanitizers in Canada. The sanitizing product manufactured at BASF’s Windsor facility will be donated to hospitals, care facilities and other institutions in areas of high need, identified in collaboration with the provincial governments of Quebec, Ontario and Alberta.
15 Shell cuts dividend for first time since World War Two
https://www.reuters.com/article/us-shell-results-idUSKBN22C0TK
Royal Dutch Shell RDSa. cut its dividend for the first time since World War Two on Thursday in a drastic step to preserve cash as it prepares for a protracted slump in demand for oil because of the coronavirus pandemic.
The Anglo-Dutch energy company also suspended share buybacks and said it would reduce oil and gas output by about a quarter after its net profit almost halved in the first three months of 2020 to $2.9 billion.
16 Special Report: Trump told Saudis: Cut oil supply or lose U.S. military support
https://www.reuters.com/article/us-global-oil-trump-saudi-specialreport-idUSKBN22C1V4
In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters.
17 Plastics Get More Respect Amid COVID-19
https://www.rigzone.com/news/plastics_get_more_respect_amid_covid19-01-may-2020-161941-article/
In a world grappling with COVID-19, however, the proverbial spotlight appears to have shifted to the beneficial applications of plastics – such as ExxonMobil’s role in developing reusable personal protective equipment for health care workers.
Rigzone recently interviewed a panel of petrochemicals industry pros to obtain their insights on how COVID-19 has influenced views about plastics and trends they see going forward. Keep reading for their perspectives.
18 Pulse Survey Reveals Business Impact of COVID-19 Measures on Mold Makers
https://www.plasticstoday.com/injection-molding/pulse-survey-reveals-business-impact-covid-19-measures-on-mold-makers/99248513962945
The American Mold Builders Association (AMBA) has launched periodic Pulse Surveys to give business leaders insight into the state of the mold building industry during the COVID-19 pandemic. The short, one-minute survey asks participants eight questions over a two-day period. More than 130 mold builders participated in the first collection period.
19 Best Practices in Processing with Recycled Material: Plastics Technology
https://www.ptonline.com/blog/post/best-practices-in-post-consumer-recycling
Welcome to Plastics Technology’s Recycling Supplement. We put this publication together with one overriding thought: You’re going to be using more post-consumer scrap in the future as you formulate your products. This will almost certainly be the case in the packaging market, but is just as likely to spill over into other end markets as well. We’re going green, make no mistake.
20 Olin swings to $80 million Q1 loss as COVID-19 saps chlorine demand
https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/043020-olin-swings-to-80-million-q1-loss-as-covid-19-saps-chlorine-demand
Sharp declines in demand for chlorine and related products pushed Olin, the world’s largest chlor-alkali producer, into an $80 million loss in the first quarter this year, the company said. “During the second half of March and into April, Olin began to experience reduced demand across our chemical portfolio,” CEO John Fischer said during the company’s first-quarter earnings call Thursday. The quarterly loss compared to a $41.7 million profit in the first three months of 2019.
21 Video: how masks are produced by Sinopec
https://www.hydrocarbonengineering.com/petrochemicals/01052020/video-how-masks-are-produced-by-sinopec/
A close-up video of production lines at the Sinopec Yanshan Factory was recorded and released on the social account of a British vlogger, named Stuart, who lives in China.
The video below showcases how disposable facial masks and N95 masks are made from polypropylene grain.
With a daily production capacity of 12 t, Sinopec Yanshan Factory can provide key raw materials for 12 million medical masks on a daily basis.
22 Woodside expects low oil and gas prices into 2021
https://www.offshore-energy.biz/woodside-expects-low-oil-and-gas-prices-into-2021/
Australia’s largest LNG player Woodside expects low oil and gas prices to continue for the rest of 2020 and into next year due to the Covid-19 coronavirus pandemic.
23 Saudis’ 43MMbbl oil flotilla will clog more than U.S. storage tanks
https://www.worldoil.com/news/2020/4/30/saudis-43mmbbl-oil-flotilla-will-clog-more-than-us-storage-tanks
A fleet of supertankers carrying Saudi oil will add to the growing congestion at U.S. ports in coming weeks at the same time producers are shutting in output as they run out of space to store unwanted supplies.
A total of 43 million barrels of Saudi oil is set to arrive on the U.S. Gulf and West coasts by May 24, according to Rystad Energy. The flotilla — comprising 28 tankers, including 14 very large crude carriers, or VLCCs — will join a queue of 76 tankers waiting to unload in U.S. ports as the greatest oil glut in history plays out.
24 TC Energy sells Ontario natural gas-fired power plants for $2.8B
https://www.bicmagazine.com/industry/natgas-lng/tc-energy-sells-ontario-natural-gas-fired-power-plants-for-2/
TC Energy Corporation has completed the sale of its interests in three Ontario natural gas-fired power plants to a subsidiary of Ontario Power Generation Inc. for $2.8 billion prior to post-closing adjustments.
The facilities include the 683-megawatt Halton Hills power plant, the 900-megawatt Napanee generating station and TC Energy’s 50 percent interest in the 550-megawatt Portlands Energy Center.
25 Permian Bankruptcies Could Fuel A Buying Spree For Big Oil
https://oilprice.com/Energy/Crude-Oil/Permian-Bankruptcies-Could-Fuel-A-Buying-Spree-For-Big-Oil.html
The United States shale revolution is over. Production in the Permian Basin, which spreads across West Texas and Southeast New Mexico, has been slowing for months, but the novel coronavirus took things from bad to much, much worse for U.S. shale. The oil price shock that followed the spread of the COVID-19 pandemic, combined with a massive global oil glut spurred by a spat between with learning OPEC+ member countries of Russia and Saudi Arabia, drove West Texas Intermediate oil prices down to a previously unthinkable -$37.63 a barrel earlier this month. While shale prices have since moderately rebounded, the Permian Basin is still in bad shape.
26 The Death Of U.S. Oil
https://oilprice.com/Energy/Crude-Oil/The-Death-Of-US-Oil.html
It’s game-over for most of the U.S. oil industry.
Prices have collapsed and storage is nearly full. The only option for many producers is to shut in their wells. That means no income. Most have considerable debt so bankruptcy is next.
Peggy Noonan wrote in her column recently that “this is a never-before-seen level of national economic calamity; history doesn’t get bigger than this.” That is the superficial view.
27 Russian Oil Production Set For First Annual Drop Since 2008
https://oilprice.com/Energy/Crude-Oil/Russian-Oil-Production-Set-For-First-Annual-Drop-Since-2008.html
Due to the OPEC+ production cut deal, Russia’s oil production could decline by 15 percent annually in 2020, Russian Energy Minister Alexander Novak told news agency Interfax in an interview published on Wednesday.
This year, Russia’s production of crude oil and condensate could be between 480 million tons and 500 million tons – or between 9.6 million bpd and 10 million bpd, in case of 100-percent compliance with the new OPEC+ agreement, Novak told Interfax.
