Friday, July 3, 2020
Energy Petrochemicals and Plastics 71
1 Weekly Resin Report: Higher Price Cycle Now Underway
https://www.plasticstoday.com/resin-pricing/weekly-resin-report-higher-price-cycle-now-underway/199583329363268
As the end of the second quarter drew near, completed volumes were better than year-ago levels but fell short of our first-quarter average, reports the PlasticsExchange in its Market Update. Both polyethylene (PE) and polypropylene (PP) prices were firm and the bottom end of both of those markets continued to lift. The flow of fresh railcars slowed as producers seek to raise prices in July; some PE and PP grades have become outright scarce.
2 Oil falls below $43 on virus fears, still heads for weekly gain
https://www.reuters.com/article/us-global-oil-idUSKBN244030
Oil fell below $43 a barrel on Friday as a resurgence of coronavirus cases raised concern that fuel demand growth could stall, although crude was still headed for a weekly gain on lower supply and wider signs of economic recovery.
The United States reported more than 55,000 new coronavirus cases on Thursday, a new daily global record for the pandemic. The rise in cases suggested U.S. jobs growth, which jumped in June, could suffer a setback.
“If this trend continues, oil demand in the region is at risk,” said Louise Dickson of Rystad Energy.
3 Oil Refining – Facing Up To Structural Overcapacity
https://www.woodmac.com/news/the-edge/oil-refining-facing-up-to-structural-overcapacity/
Refining was rejuvenated in the early years of this century. Overcapacity and depressed margins forced refiners to focus on costs and managing for margin. Proof of success was the resilience of refining profitability after the oil price crash of 2014, and the elevation of downstream leaders to the very top of Big Oil.
The current downturn is tougher than any experienced before, and may even be providing a glimpse into refining’s long-term challenges when oil demand eventually enters decline. I asked Alan Gelder, Head of Downstream Oil, and Gerrit Venter, Corporate Analysis, how the industry will respond this time.
4 Pandemic hastens threat of closure for struggling oil refineries
https://www.reuters.com/article/us-global-oil-refining-capacity-idUSKBN2431VC
The collapse in oil demand from the COVID-19 pandemic is hastening the reckoning for those refiners already struggling as new capacity overtakes demand, posing an existential threat to many, particularly Europe’s ageing plants.
Even before the pandemic struck, which at its height destroyed over 20% of global oil demand, analysts expected global refining capacity would have to rationalise, particularly in Europe.
5 Big Oil’s Nightmare Is Coming True
https://oilprice.com/Energy/Energy-General/Big-Oils-Nightmare-Is-Coming-True.html
Royal Dutch Shell said that it could cut the value of its oil and gas assets by as much as $22 billion, as it takes a dim view of the state of the oil market. The move adds more evidence to the notion that a huge slice of oil reserves will wind up as stranded assets. Shell cut its Brent oil prices forecast from $60 per barrel to $35 for this year, and lowered its 2021 and 2022 forecasts to $40 and $50 per barrel, respectively, down from $60 previously. The lower outlook reflects the expected damage to the oil market due to the coronavirus and the negative impacts on the global economy, Shell said.
6 Goldman Sachs sees oil demand returning to pre-coronavirus levels by 2022
https://www.reuters.com/article/us-global-oil-research-goldman-idUSKBN2430IE
Goldman Sachs said on Thursday a pick-up in commuting, a shift to private transportation and government efforts to improve economies with higher infrastructure spending should help global oil demand return to pre-coronavirus levels by 2022.
Demand is expected to fall by 8% this year, before rebounding 6% in 2021 and fully recovering to pre-pandemic levels by 2022, the U.S. bank said in a note.
7 OPEC basket oil price rises above $40 for first time in four months
https://www.reuters.com/article/us-oil-opec-prices-idUSKBN2432FV
he Organization of the Petroleum Exporting Countries’ basket oil price rose above $40/bbl for the first time in four months, reflecting higher official selling prices, according to the group’s data.
The basket price stood at $42.66/bbl on July 1, almost 12% higher than the previous day, and the highest since March 3, the data showed.
8 Are Oil Bulls In For A Disappointing July?
https://oilprice.com/Energy/Crude-Oil/Are-Oil-Bulls-In-For-A-Disappointing-July.html
The oil market continues to tighten, but the surge of coronavirus cases in the U.S. could derail the rally in crude prices. OPEC+ can claim most of the credit for engineering an oil price rally, keeping upwards of 9.7 million barrels per day (mb/d) offline for several months. The one-month extension through July added to the effort, as did the improved compliance. “Although there is still the danger of demand outages in view of increased new cases of Covid-19, OPEC+ seems to have the market under control at the moment,” Commerzbank wrote in a note on Wednesday.
9 China’s manufacturing sector helping boost oil demand
https://www.argusmedia.com/pages/NewsBody.aspx?id=2119674&menu=yes
China’s manufacturing sector continued to strengthen in June, helping boost oil demand.
The Caixin manufacturing purchasing managers’ index (PMI) for China increased to 51.2 in June from 50.7 in May, in what was the second successive monthly increase. A reading above 50 indicates an expansion in the sector. Demand also picked up, with the sub-index for total new orders expanding for the first time since January.
10 US aluminum sees bright spot amid coronavirus crisis
https://blogs.platts.com/2020/07/02/us-aluminum-demand-coronavirus-pandemic/
The US metals market, in particular, saw the removal of an estimated 33,000 vehicles per day from production as all major auto producers across the country halted operations in response to government mandates and concerns over the welfare of workers.
Because the transportation sector is the largest end user of aluminum, accounting for around 35% of aluminum consumption, it is easy to see why so many market participants expressed concern over the lingering effects coronavirus would have on the health of the industry.
11 US petrochemical industry forced to rethink investment decisions amid COVID-19 pandemic
https://www.bicmagazine.com/industry/investment-banking/globaldata-us-petrochemical-industry-forced-to-rethink-inves/
The COVID-19 outbreak and crude oil price crash have pushed petrochemical companies in the US to announce project delays. With major complexes such as Shell Beaver County Complex and Formosa St. James Parish Complex having already been affected, prevailing uncertainties and economic slowdown due to the outbreak could push companies to make more such announcements over the short-term, says GlobalData, a leading data and analytics company.
12 Worldwide offshore rig count in June down 65 units year over year
https://www.offshore-energy.biz/worldwide-offshore-rig-count-in-june-down-65-units-year-over-year/
The worldwide offshore rig count in June 2020 dropped by 65 rigs year-over-year and 2 rigs sequentially, according to a report by Baker Hughes.
Baker Hughes splits its report into an international and North America one, which combine into a worldwide rig count.
The international rig count for June 2020 was 781 down 24 from the 805 counted in May 2020, and down 357 from the 1,138 counted in June 2019.
13 Non-Pemex imports of refined products into Mexico facing delays
https://www.argusmedia.com/pages/NewsBody.aspx?id=2119717&menu=yes
Non-Pemex imports of refined products into Mexico are facing more bureaucratic delays in recent weeks, according to shippers, with customs officials putting holds on diesel cargoes in particular.
Excessive delays in customs have been long been a complaint among Mexican importers. One private-sector Mexico City-based importer said he had to move away from truck deliveries to rail in order to see fewer delays.
14 OPEC cuts June oil exports by 1.84 million bpd: Kpler
https://www.reuters.com/article/us-oil-opec-idUSKBN24318C
OPEC cut oil exports in June by 1.84 million barrels per day (bpd) from May levels as it works to implement an output reduction agreement with Russia and other allies, according to estimates from Kpler, which tracks oil shipments.
OPEC’s crude exports averaged 17.2 million bpd last month, Kpler said in an emailed report. Saudi exports accounted for almost half of the month-on-month drop, falling by 979,000 bpd.
15 Exxon signals second quarterly loss in a row on production, refining hit
https://www.reuters.com/article/us-exxon-mobil-outlook-idUSKBN2431M1
Exxon Mobil Corp’s (XOM.N) oil and gas producing and refining businesses will report operating losses in the second quarter, it said in a regulatory filing on Thursday, setting the stage for the company to post another quarterly loss this year.
Oil prices are down 35% since January as the Covid-19 pandemic slashed demand and a global glut forced widespread production cuts. Rivals Royal Dutch Shell (RDSa.L) and BP Plc (BP.L) have disclosed massive spending cuts and writedowns due to the price drop.
16 Braskem Completes Construction of World-Scale PP Facility in LaPorte, Texas
https://www.ptonline.com/news/braskem-completes-construction-of-world-scale-pp-facility-in-laporte-texas
Braskem (Philadelphia) has completed construction of its newest, world-class PPproduction facility in La Porte, Texas. Said to be the first new PP facility built in North America since 2003, Braskem’s facility has a designed production capacity of over 1-billion lb/yr and has the capability to produce the entire PP portfolio including including homopolymer, impact copolymer and random copolymer.
17 Asia naphtha draws support from sturdy demand; premiums firm
https://www.icis.com/explore/resources/news/2020/06/30/10524383/asia-naphtha-draws-support-from-sturdy-demand-premiums-firm
Asia naphtha prices are finding support from healthy downstream sectors, helping to underpin spot cargo premiums, with supportive near-term demand likely to be sustained.
Open-specification naphtha prices for first-half August averaged at $385/tonne CFR (cost and freight) Japan at early hours session on Tuesday, reversing the losses from the previous session on 29 June to climb by over $18/tonne.
18 South Korean steam crackers to use more LPG feedstock from July as discount to naphtha widens
https://www.spglobal.com/platts/en/market-insights/latest-news/petrochemicals/070120-south-korean-steam-crackers-to-use-more-lpg-feedstock-from-july-as-discount-to-naphtha-widens
The diverging price spread between LPG and naphtha in recent weeks has incentivized South Korean petrochemical producers to partially switch feedstock from naphtha to LPG from July, market participants said.
South Korean naphtha buyers Hanwha Total, LG Chem, Lotte Chem and YNCC have all purchased LPG to take advantage of the cheaper feedstock, company sources have confirmed in recent days.
“Most of the South Korean crackers have bought LPG,” a South Korean naphtha end-user said.
19 IEEFA update: Problems mount for PTTGCA petrochemical plant
https://ieefa.org/ieefa-update-foot-dragging-over-pttgca-petrochemical-complex-project-in-ohio/
New disclosures by Thailand-based PTT Global Chemical America (PTTGCA) regarding its proposed petrochemical plant planned for Belmont County, Ohio, illuminate the financial risks facing the project. Interested citizens, community advocates and elected leaders should understand these risks and the disturbing implications for the future of the community.
20 Saudi Arabia Eyes Total Dominance In Oil And Gas
https://oilprice.com/Energy/Crude-Oil/Saudi-Arabia-Eyes-Total-Dominance-In-Oil-And-Gas.html
Saudi Arabia’s Energy Minister Prince Abdulaziz claimed last week that the Kingdom will be the world’s biggest hydrocarbon producer “even” in 2050.
“I can assure that Saudi Arabia will not only be the last producer, but Saudi Arabia will produce every molecule of hydrocarbon and it will put it to good use … It will be done in the most environmentally sound and safe way and the most sustainable way,” Abdulaziz said when asked about the oil market outlook in 2050 during a virtual conference convened by Saudi Arabia’s Future Investment Initiative Institute (FII-I).
