Friday, June 12, 2020
Energy Petrochemicals and Plastics 68
1 Oil Price Fundamental Daily Forecast – Stock Market Rebound Fueling Recovery from Early Lows
https://www.fxempire.com/forecasts/article/oil-price-fundamental-daily-forecast-stock-market-rebound-fueling-recovery-from-early-lows-654895
U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are trading nearly flat after clawing back earlier losses. The rebound is likely being fueled by profit-taking and position-squaring ahead of the weekend. A slight recovery in demand for risky assets after a steep sell-off on Thursday could also be contributing to the technical bounce.
2 Natural Gas Price Fundamental Daily Forecast
https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-rangebound-as-renewed-coronavirus-fears-cap-gains-654918
Natural gas futures are edging lower on Friday shortly before the regular session opening as investors weigh the impact of the latest storage report against continued forecasts calling for more heat in June. Some traders are blaming the fear of a second outbreak of coronavirus on the early selling pressure. A second wave of COVID-19 would be devastating to demand.
3 Weekly Resin Report: Recovery in Full Swing at Trading Desk
https://www.plasticstoday.com/resin-pricing/weekly-resin-report-recovery-full-swing-trading-desk/125370657163180
Judging solely by trading activity in the resin market, it would appear that our economy is taking strong steps to put COVID-19 behind us, as a recovery is in full swing. The flow of offers remained reduced and prices for polyethylene (PE) moved higher, while polypropylene (PP) held steady last week, according to the PlasticsExchange.
4 It’s The Oil Demand, Stupid! But Add Uncertainty To The Mix!
https://www.forbes.com/sites/thebakersinstitute/2020/06/10/its-the-oil-demand-stupid-but-add-uncertainty-to-the-mix/
For oil markets the 2020 story is not as much about supply as it is about demand, or rather it’s lack. To be sure the oil price war between Saudi Arabia and Russia rocked the markets. But soon it became clear that there is not enough demand for the additional volumes that either country wanted to produce. Hence, the relatively quick end to a Russia/OPEC standoff.
5 The IEA expects global gas demand to fall
https://www.argusmedia.com/pages/NewsBody.aspx?id=2113017&menu=yes
Europe will account for over a quarter of the projected fall in global gas consumption this year from 2019, the Paris-based International Energy Agency (IEA) said.
The IEA expects global gas demand to fall by 150bn m³ in 2020 from a year earlier because of the repercussions of the Covid-19 pandemic. This 4pc decline would be the largest since the gas market developed at scale in the second half of last century, and double the 2pc fall in 2009 over the previous financial crisis, the IEA said.
6 Goldman Sachs expects oil rally to run out of steam soon
https://www.reuters.com/article/us-global-oil-research-goldman-idUSKBN23G0JN
Oil prices are likely to pull back in the coming weeks due to the uncertain path of future demand and a “daunting” inventory overhang, Goldman Sachs said in a note dated Monday.
“The collapse in (refining) margins to unprecedented lows is reflective of both over-valued crude prices as well as a more moderate demand recovery, two pillars of our short-term bearish view,” the Wall Street bank said.
7 The pandemic and a mild winter have delivered a historic shock to the global natural gas market
https://www.bicmagazine.com/industry/natgas-lng/the-pandemic-and-a-mild-winter-have-delivered-a-historic-sho/
The combination of the Covid-19 crisis and an exceptionally mild winter in the northern hemisphere have put global demand for natural gas on course for its largest annual decline in history, the International Energy Agency said today in a new report. Global gas demand is expected to fall by 4%, or 150 billion cubic metres (bcm) – twice the size of the drop following the 2008 global financial crisis.
8 U.S. crude stocks bloated by aftermath of volume war
https://www.reuters.com/article/us-oil-global-kemp-idUSKBN23I22S
U.S. petroleum inventories climbed again last week to a record 2.1 billion barrels, mostly as a result of rapid crude imports, with an unusually large volume again arriving from Saudi Arabia.
Once the extra tankers loaded at the height of the Saudi-Russian volume war have finished discharging, which should be within the next week or two, U.S. crude stocks should stabilise.
9 Packaging demand supports European petrochemicals, challenges persist
https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/061120-factbox-packaging-demand-supports-european-petrochemicals-challenges-persist
European petrochemical markets remain volatile with ongoing uncertainty around demand recovery as COVID-19 lockdowns begin to ease. Some petrochemicals have fared better than others during the pandemic, with plastics used for food and pharmaceutical applications finding support while those exposed to the automotive and construction sectors have struggled.
10 Plastics Processing Business Continued Contracting in April
https://www.ptonline.com/blog/post/plastics-processing-business-continues-contracting-in-april-
Gardner Intelligence’s Plastics Processing Business Index experienced unprecedented deceleration of most measures of business activity for the month. April’s reading of 33.4 was more than 10-points below both the prior month’s low and the previous cyclical low of 2015. Survey data provided by only custom processors was little better, with a monthly reading of 34.1.
11 Moving Toward Third Quarter, Prices of All Volume Commodity Resins Appear to Have Bottomed Out: Plastics Technology
https://www.ptonline.com/blog/post/moving-toward-third-quarter-prices-of-all-volume-commodity-resins-appear-to-have-bottomed-out
As we approach the third quarter, prices of all nice volume commodity resins appeared to have bottomed out generally. Still, there might be some further downward pressure for resins such as PS, nylon 6 and PET, while there is upward pressure for PE and possibly PVC with the return of the Chinese export market along with higher feedstock costs.
12 Early Signs of an Upturn from the Great Economic Disruption?
https://www.plasticsindustry.org/Great-Economic-Disruption-2020
The unemployment rate in May can be viewed from two angles. May job numbers from the U.S. Bureau of Labor Statistics estimates show that the U.S. employment rate fell to 13.3% in May following the 14.7% rate in April. On one hand, it is noteworthy that the unemployment rate stopped increasing in May. On the other hand, it is still significantly above the 3.5% rate in February and 4.4% in March. The US economy enjoyed unemployment rates at or below 4.0% since March 2018. As Americans grew accustomed to a strong labor market, double-digit unemployment rates in two consecutive months cause consternation to some.
13 Oil prices slump 8% as virus-related demand concerns resurface
https://www.reuters.com/article/us-global-oil-idUSKBN23I02D
Oil prices tumbled about 8% a barrel on Thursday, fuelled by renewed concerns about demand destruction as new cases of coronavirus tick up globally, while crude inventories hit a record in the United States.
U.S. coronavirus cases surpassed 2 million on Wednesday, according to a Reuters tally, and new infections are rising slightly after five weeks of declines. While most states have loosened restrictions on movement that shackled demand, fuel consumption remains 20% below typical levels, as consumers remain cautious.
14 Latin American oil exports to USGC see small gains
https://blogs.platts.com/2020/06/11/latin-american-crude-exports-usgc-coronavirus/
Latin American countries, excluding Venezuela and Argentina, have slightly increased crude exports to the US Gulf Coast market in 2020 to date, despite fierce competition from Canadian and Middle East producers.
In the first five months of 2020, Mexico, Colombia, Ecuador, Brazil and Guyana exported a total of 148 million barrels of crude to refineries located in the US Gulf Coast, US Customs Bureau and S&P Global Platts Analytics data showed. That was up 1.3% from 146 million barrels recorded in the same period of 2019.
15 Mexican Oil Major Pemex Slashes Thousands Of Jobs In Oilfield Services
https://oilprice.com/Latest-Energy-News/World-News/Mexican-Oil-Major-Pemex-Slashes-Thousands-Of-Jobs-In-Oilfield-Services.html
Mexico’s oil major Pemex has begun suspending oilfield service contracts, effectively eliminating several thousand jobs, unnamed sources from the industry told Bloomberg.
The move, which aims to cut Pemex’s costs, has so far involved at least eight Mexican and international oilfield service providers and suppliers, according to the Bloomberg sources. Most of these were involved in offshore field servicing.
16 Oil Traders Lose Asian Forum as APPEC Goes Virtual
https://www.rigzone.com/news/wire/oil_traders_lose_asian_forum_as_appec_goes_virtual-11-jun-2020-162374-article/
Fortunes have been made — and lost — in the oil market this year on an unprecedented scale, but it looks like the world’s traders will have to forgo their last chance to get together and celebrate or commiserate.
That’s because S&P Global Platts, the organizer of Singapore’s Annual Asia Pacific Petroleum Conference, just announced that it’s going to hold the event virtually because of the coronavirus.
17 ConocoPhillips CEO Sees Shale Comeback
https://www.rigzone.com/news/conocophillips_ceo_sees_shale_comeback-10-jun-2020-162354-article/
U.S. shale development is dramatically less robust than it used to be, but ConocoPhillips CEO Ryan Lance clearly is not ready to declare the shale era over.
“I don’t think shale’s gone,” Lance told IHS Markit Vice Chairman Daniel Yergin in a June 4 interview. “I don’t think anybody says that. There’s going to be some very low-cost to supply shale resource and they still exist in the United States. We have a lot of that in our own company as well – reserves and resources that we will come back to, putting rigs back to work, putting frack spreads back to work and investing in growth again in shale.”
18 Bulls Beware: A Dark Cloud Is Forming Over Oil Markets
https://oilprice.com/Energy/Energy-General/Bulls-Beware-A-Dark-Cloud-Is-Forming-Over-Oil-Markets.html
Bullish sentiment appears to have returned to the stock markets with a vengeance. In a historic rally that has taken even die-hard bulls by surprise, the S&P 500 has managed to claw back all of its 2020 losses, taking just 53 sessions for the index to fully restore the nearly $10T in value it shed in an epic bear market. The oil markets have been nearly as impressive.
19 Russia’s Transneft reports 13% rise in quarterly net income
https://www.reuters.com/article/us-russia-transneft-results-idUSKBN23I1EN
Russia’s oil pipeline monopoly Transneft (TRNF_p.MM) reported on Thursday a 13% increase in first-quarter net earnings year on year to 56.7 billion roubles ($822 million) due to higher sales.
Transneft’s revenues in January-March edged up 1.3% to 263.3 billion roubles.
The company also said it had paid 4.9 billion roubles ($71 million) to oil suppliers in the first quarter as compensation for oil contamination in April 2019.
20 Shell launches sale of stakes in Norwegian fields, pipelines
https://www.reuters.com/article/us-shell-m-a-norway-idUSKBN23I1YX
Royal Dutch Shell has launched the sale of its stakes in two oilfields and two pipelines in Norway, according to a sales document seen by Reuters.
Shell is selling its 6.45% interest in the Kvitebjorn field and pipeline and its 3.225% interest in the Valemon Unit and Valemon Rich Gas Pipeline, according to the document.
21 Trump uses oil diplomacy, executive orders to aid US producers
https://blogs.platts.com/2020/06/10/trump-us-oil-diplomacy-executive-orders-producers/
Perhaps the biggest aid to the sector was Trump’s involvement in the March talks between Saudi Arabia and Russia to end their oil supply brinkmanship that was hammering oil prices already beset by freefalling demand. The OPEC+ leaders eventually agreed to cut oil supply by nearly 10 million b/d through at least June.
“We saved the energy industry,” Trump boasted at a June 5 White House briefing, referring to the OPEC+ talks. “That would have been catastrophic to lose it, and now [oil prices are] up to almost $40/b. People would have said that’s impossible, but we got Saudi Arabia, Russia and others to cut back very substantially.”
22 Ethylene prices in Asia-Pacific
https://www.argusmedia.com/pages/NewsBody.aspx?id=2113113&menu=yes
Ethylene prices in Asia-Pacific are continuing to rise, crossing the $800/t cfr northeast Asia mark this week, supported by tight supply availability and recovering downstream demand.
Prices in the region have risen for a seventh consecutive week, reversing most of the losses incurred since the Covid-19 outbreak began in late January.
23 EIA expects 2020 summer U.S. electricity demand to be lowest since 2009
https://www.eia.gov/todayinenergy/detail.php?id=44055
The U.S. Energy Information Administration (EIA) expects U.S. electricity demand to total 998 billion kilowatthours this summer (June through August), the lowest level of summer electricity consumption in the United States since 2009 and 5% less than last summer.
24 Demand Doubles for Some Used Plastics Processing Equipment
https://www.plasticstoday.com/blow-molding/demand-doubles-some-used-plastics-processing-equipment/181096375063162
Used machines are helping plastic and liquid processors serve society during the coronavirus crisis, with demand for used plastic processing machinery doubling in some cases. Used machinery company MachinePoint, based in Valladolid, Spain, noted in a release that “never in our history has the world had to react at the same time against a common threat.”
25 Petrochemical Index plunges to November 2003 level
https://www.britishplastics.co.uk/News/icis-global-petrochemical-index-plunges-to-november-2003-lev/
As the impact of the falling oil price and coronavirus-driven demand destruction slammed the sector, the ICIS Petrochemical Index (IPEX) plunged in April.
The global index stands at a level last seen in November 2003 and is just below that in January 2009.
As petrochemical and plastic prices fell across the board, each of the regional components of the global index fell sharply month on month.
26 Saudi oil market share set to hit highest since 1980s: J.P. Morgan
https://www.reuters.com/article/us-oil-saudi-jpmorgan-idUSKBN23J1MB
Saudi Arabia’s share of the oil market is set to rise this decade to its highest since the 1980s as investment in production elsewhere dries up in the wake of the coronavirus crisis, J.P. Morgan said in a report.
