Friday, June 5, 2020
Energy Petrochemicals and Plastics 67
1 Oil rises on U.S. jobless drop, OPEC+ meeting hopes
https://www.reuters.com/article/us-global-oil-idUSKBN23C03V
Oil prices rose on Friday after an unexpected fall in the monthly U.S. jobless rate and OPEC’s decision to bring forward to Saturday discussions on whether to extend record production cuts.
Brent crude futures were up $2.40, or 6.0%, at $42.39 a barrel as of 1243 GMT. U.S. West Texas Intermediate (WTI) crude futures rose $2.05, or 5.48%, to $39.46 a barrel.
2 Natural Gas Price Fundamental Daily Forecast
https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-tropical-storm-cristobal-tracking-toward-production-facilities-653588
Natural gas futures are trading nearly flat for a second session on Friday, underpinned by a smaller-than-expected storage injection, but capped by an uncertain demand picture in the wake of the COVID-19 pandemic and as a tropical storm in the Gulf of Mexico nears key production facilities.
In other news, spot gas prices declined across the country, with Natural Gas Intelligence’s (NGI) Spot Gas National Average down 7.0 cents to $1.665.
3 A Perfect Storm For Petrochemicals
https://oilprice.com/Energy/Energy-General/Big-Oils-Petrochemical-Bet-Is-Turning-Sour.html
The market for one of the main feedstocks for plastic – polyethylene – has fallen sharply over the past year, with a pronounced dip since the onset of the pandemic. “Even before the coronavirus outbreak, we were already expecting to see various petrochemical value chains … heading into an oversupply situation,” Catherine Tan, principle analyst at Wood Mackenzie, told Reuters.
4 Up for grabs: Covid-19 drives reserves of global oil and gas assets for sale to above 12.5 billion
https://www.rystadenergy.com/newsevents/news/press-releases/up-for-grabs-covid-19-drives-reserves-of-global-oil-and-gas-assets-for-sale-to-above-12.5-billion-boe/
Oil and gas companies currently have assets for sale with recoverable reserves of more than 5 billion barrels of liquids and 7.5 billion barrels of oil equivalent (boe) of natural gas, Rystad Energy estimates. While some of these planned divestments were announced before the Covid-19-related oil price crash, more were added in reaction to the pandemic and its aftermath.
5 Natural gas prices could go negative on global oversupply
https://www.worldoil.com/news/2020/6/3/natural-gas-prices-could-go-negative-on-global-oversupply
The specter of negative prices is hanging over energy markets more than a month after oil’s unforgettable crash below zero.
While crude has staged a rapid recovery after a deal by the biggest producers to curb a surplus, the $600 billion global gas market remains extraordinarily oversupplied. Traders and analysts say the worst may be yet to come as demand falls and storage nears capacity, creating the ideal conditions for negative prices in some parts of the world.
6 Commodity Resin Prices Plunge in Second Quarter
https://www.ptonline.com/articles/commodity-resin-prices-plunge-in-second-quarter
Prices of all five major commodity thermoplastics have been dropping throughout the second quarter. Despite strong demand for packaging and medical products, the impact of the coronavirus pandemic coupled with low crude-oil and other feedstock prices have significantly dampened demand for industrial and durable goods. Nearly all PE, PP, PS, PVC and PET suppliers have throttled back on resin production to adjust to weakened demand.
7 Weekly Resin Report: Trading Activity Rebounds, but Processors Still Wrestle with Uncertainty
https://www.plasticstoday.com/resin-pricing/weekly-resin-report-trading-activity-rebounds-processors-still-wrestle-uncertainty/107810854863130
Domestic prices held steady last week with a firm undertone, and off-grade prices inched a bit closer to Prime levels. Recovering energy and feedstock costs strengthened international resin prices, which were supportive to Houston levels. Strong export demand persisted, particularly for polyethylene (PE), but producers were essentially sold out as of the previous week. They intend to raise asking prices for June sales. There were a few Prime polypropylene (PP) railcars to move since some resellers’ sales fell short of forecasts as the automotive sector still lagged.
8 How the Coronavirus Crisis Will Change Plastics Processing
https://www.ptonline.com/blog/post/how-the-coronavirus-crisis-will-change-plastics-processing
I’ll admit, I’m a bit befuddled about the seemingly conflicting accounts I’ve been getting lately about what’s going on in plastics processing. On the one hand, I’m regularly hearing stories and getting press releases about processors ramping up quickly to turn lines that had been running conventional plastics products into very specific personal protection equipment in the fight against the coronavirus pandemic.
9 Japan’s Sumitomo Chemical to cut petchem investment
https://www.argusmedia.com/en/news/2110133-japans-sumitomo-chemical-to-cut-petchem-investment
Japanese chemical firm Sumitomo Chemical will lower its investment target in the petrochemical and plastic business for April 2019-March 2022, amid weakening plastic demand in light of Covid-19.
Sumitomo Chemical aims, in its three-year plan, to invest approximately 10pc of the company’s total investment of ¥850bn ($7.9bn) during April 2019-March 2022 in petrochemicals and plastics. This is down from the original plan to invest some 20pc of ¥700bn over the same period.
10 Global methanol operating rate cuts expected in second half
https://www.icis.com/explore/resources/news/2020/06/04/10515269/insight-global-methanol-operating-rate-cuts-expected-in-second-half
Although demand is slowly picking up, the global methanol market will remain soft in the second half of the year with operating rate cuts expected globally.
This is predominantly driven by oversupply, a weakened futures market in China, and lack of storage which puts pressure on second half prices.
11 Easing lockdown measures revs up Asia petrochemical markets
https://www.icis.com/explore/resources/news/2020/06/03/10514706/easing-lockdown-measures-revs-up-asia-petrochemical-markets
Petrochemical markets in Asia are coming back to life after about two months of general weakness as pandemic-induced lockdowns in most countries in the region are being lifted, boding well for demand from June onward.
Market sentiment is upbeat, providing room for prices of selected petrochemicals to post strong increases, aided by gains in upstream crude markets.
A strong recovery in demand, however, is still out of the question amid the coronavirus pandemic.
12 China approves $20 billion mega petchem complex in Shandong oil hub
https://www.reuters.com/article/us-china-oil-refinery-shandong-exclusive-idUSKBN2390OU
hina is reviving a $20 billion petrochemical project in eastern Shandong province as part of efforts to dial up infrastructure spending to support an economy struggling with the impact of the coronavirus pandemic, two China-based industry sources said.
The 400,000 barrel-per-day (bpd) refinery and 3 million tonne-per-year ethylene plant in Yantai, Shandong, the country’s hub for independent oil refineries, was proposed years ago but approval has been slowing in coming because of China’s struggle with excess refining capacity.
13 What U.S. shale’s woes mean for Canada’s oil and gas industry
https://www.cbc.ca/news/business/us-shale-oil-impact-on-canada-1.5593771
The rise of the U.S. shale oil sector shook up energy markets worldwide, but the economic wallop of the pandemic is now rattling that same industry to the core.
The situation has led to billions of dollars of losses and fears of a wave of bankruptcies, while some believe a recovery could be at least a year away or even more.
14 Why Saudi Arabia Is Desperate To Extend OPEC+ Cuts
https://oilprice.com/Energy/Oil-Prices/Why-Saudi-Arabia-Is-Desperate-To-Extend-OPEC-Cuts.html
OPEC+ hopes to reduce global storage volumes with their production cuts, and hopes to extend them through at least, the summer. OPEC’s regular meeting in Vienna is coming up and of course the Russians will be invited as they hold the key to realizing the 9.7 mm BOPD cut now in effect through June. Their hope is to extend these cuts beyond the June-30th expiration through September, 1st.
15 Russia’s Novak sees potential 3-5 million bpd oil market shortage in July
https://www.reuters.com/article/us-global-oil-russia-novak-idUSKBN23B0ZF
Russian Energy Minister Alexander Novak said on Thursday that the global oil market could face a shortage of 3-5 million barrels per day (bpd) in July, depending on a deal to be reached by OPEC+ producers, Interfax news agency reported.
The OPEC+ group of oil producers agreed to cut production by almost 10 billion bpd in May and June to support global oil prices. They have been discussing whether to continue the cuts beyond June at the same pace.
16 Global LNG demand heading into seasonal contraction
https://www.offshore-energy.biz/woodmac-global-lng-demand-heading-into-seasonal-contraction/
The global liquefied natural gas (LNG) industry is about to face its first seasonal demand contraction since 2012.
Demand in summer 2020 expected to fall 2.7 per cent or 3 million tonnes (Mt) year-on-year, says the consultancy Wood Mackenzie.
Lockdown measures and negative economic outlook stemming from the coronavirus pandemic has taken its toll on Asian LNG importing countries, resulting in the second consecutive year of sluggish LNG demand growth.
17 Offshore Oil Is On The Brink Of Collapse
https://oilprice.com/Energy/Crude-Oil/Offshore-Oil-Is-On-The-Brink-Of-Collapse.html
Project cancellations, spending cuts, well shut-ins: the problems and dilemmas plaguing onshore oil producers have also spread to offshore. And while the effects of the Covid-19 pandemic on onshore drilling may already be wearing off here and there where drilling is cheap, they may linger for longer offshore.
Despite major progress made by oil companies in the cost department, offshore drilling often remains more expensive than onshore drilling, not least because the process of extraction is more complex. These are costs that one can’t cut or forgo. What this means in the current environment, is that offshore oil may suffer more than onshore oil.
18 Natgas flows to U.S. LNG export plants sink to 9-month low due to coronavirus
https://www.reuters.com/article/us-usa-lng-coronavirus-idUSKBN2390I1
The amount of natural gas flowing on pipelines to U.S. liquefied natural gas export plants is at its lowest levels since August, a signal of weak worldwide demand due to government lockdowns to repress the coronavirus.
Worldwide gas prices have plunged to record lows in Europe and Asia as lockdowns squeeze demand. Consumption of liquefied natural gas (LNG) has remained stronger than gasoline demand as LNG is used for power generation, but the cash crunch hitting the global economy has cut demand.
19 Which oil and gas segment will pick-up faster following COVID-19?
https://www.offshore-technology.com/news/petrochemical-oil-gas-segment-to-recover-quicker-after-covid-19/
Fall in crude prices and reduced demand from end-user markets during the COVID-19 pandemic has significantly impacted the oil and gas industry forcing companies to postpone investments and stall existing projects until the situation improves.
Offshore Technology has conducted a poll to assess which oil and gas segments among petrochemical, refinery, upstream, and midstream will pick-up faster than others after COVID-19.
20 China drives global oil demand recovery out of coronavirus collapse
https://www.reuters.com/article/us-global-oil-demand-analysis-idUSKBN23A0XF
China’s oil demand has recovered to more than 90% of the levels seen before the coronavirus pandemic struck early this year, a surprisingly robust rebound that could be mirrored elsewhere in the third quarter as more countries emerge from lockdowns.
