Crude Oil steady USA supply demand Crude Oil steady USA supply demand Crude Oil steady USA supply demand Crude Oil steady USA supply demand Crude Oil steady USA supply demand Crude Oil steady USA supply demand Crude Oil steady USA supply demand Crude Oil steady USA supply demand
Oil steady as extra U.S. supply balances strong demand
LONDON (Reuters) – Oil prices steadied on Monday as U.S. production hit a record-high and OPEC members considered boosting supply to balance rising global demand.
FILE PHOTO: Pipelines run to Enbridge Inc.’s crude oil storage tanks at their tank farm in Cushing, Oklahoma, U.S., March 24, 2016. REUTERS/Nick Oxford/File Photo
Benchmark Brent crude oil LCOc1 was unchanged at $76.79 a barrel by 0730 GMT. U.S. light crude CLc1 was up 5 cents at 65.86 a barrel. Last week, the U.S. contract lost around 3 percent, adding to a near 5-percent decline from a week before.
“We are going into summer, the high demand season, and I think we are going to see a fall in U.S. crude oil inventories, but shale oil output is growing. Which one is going to win is the issue,” said Tony Nunan, risk manager at Mitsubishi Corp.
U.S. crude production climbed in March to 10.47 million barrels per day (bpd), a monthly record, data from the Energy Information Administration showed last week.
U.S. drillers added two oil rigs in the week to June 1, bringing the total to 861, the most since March 2015, energy services firm Baker Hughes said on Friday. That was the eighth time drillers have added rigs in the past nine weeks. [RIG/U]
Arab oil ministers agreed over the weekend on the need for continued cooperation between members of the Organization of the Petroleum Exporting Countries and other big producers to balance global supply, Kuwait’s state news agency KUNA reported on Sunday.
OPEC ministers from Saudi Arabia, the United Arab Emirates, Kuwait and Algeria along with their counterpart from non-OPEC Oman met unofficially in Kuwait on Saturday.
OPEC meets formally on June 22 to set oil policy. It is expected to agree to raise output to cool the market amid worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC sources familiar with the discussions told Reuters last month.
Saudi Arabia, effective OPEC leader, and Russia have discussed boosting output to compensate for supply losses from Venezuela and to address concerns about the impact of U.S. sanctions on Iranian output.
Russia’s largest oil producer Rosneft (ROSN.MM) will be able to restore 70,000 bpd of oil output in just two days if global production limits are lifted, Renaissance Capital wrote in a client note.
Hedge funds and other money managers cut their bullish wagers on U.S. crude futures and options, according to data released on Friday, as oil prices slumped on oversupply fears.
Additional reporting by Naveen Thukral in Singapore; Editing by Louise Heavens
Octal Petrochemical PET plant Oman Octal Petrochemical PET plant Oman Octal Petrochemical PET plant Oman Octal Petrochemical PET plant Oman Octal Petrochemical PET plant Oman Octal Petrochemical PET plant Oman Octal Petrochemical PET plant Oman Octal Petrochemical PET plant Oman
Octal Petrochemical unexpectedly closed the PET plant in Oman because of the cyclone
MOSCOW – Oman Octal Petrochemicals, one of the largest producers of polyethylene terephthalate (PET) in the world, on May 25, unplannedly stopped production at the PET plant in the port city of Salalah (on the southern coast of the Sultanate of Oman) due to the cyclone of the 2nd category “Mekunu” (Mekunu), told ICIS market participants.
According to them, this enterprise with the capacity of 850 thousand tons of PET per year should return to work about a week later.
The company at this complex manages four production lines.
Earlier it was noted that at the end of last year, Octal Petrochemicals closed two of the four lines on the site in the city of Salalah with a capacity of 600 thousand tons per year for modernization from December 4-7 to January 8-12, 2018.
According to the Price Review of ICIS-MRC , in March shipments of bottled granulate to Russia from far abroad increased sharply. Import excluding supplies from Belarus last month reached 11.3 thousand tons against 4.3 thousand tons a month earlier and 6.2 thousand tons in March last year. In the first quarter as a whole, the import of bottled PET excluding Belarusian supplies increased by 21% to 17.4 thousand tons against 14.4 thousand tons a year earlier. Import of all types of PET from abroad to Russia in the first quarter amounted to 21.1 thousand tons against 18.7 thousand tons in the same period last year.
Oman company Octal Petrochemicals, which was founded in 2006, is one of the largest producers of polyethylene terephthalate (PET) in the world. The company owns a petrochemical complex in the city of Salalah (Oman), the annual capacity of which is about 930 thousand tons of PET. The company has planned to seriously expand its production facilities. After the implementation of all planned projects, the annual capacity of the company will increase to 2.5 million tons of TFA and PET. In recent years, the company has significantly increased its revenues, which increased from USD500 million to USD1.5 billion.
Iran Antibacterial Polyester Strings Using Nanotechnology Iran Antibacterial Polyester Strings Using Nanotechnology Iran Antibacterial Polyester Strings Using Nanotechnology Iran Antibacterial Polyester Strings Using Nanotechnology
Iran Develops Antibacterial Polyester Strings Using Nanotechnology
Iranian researchers have used nanotechnology to develop antibacterial polyester strings that cause the least degree of poisoning for human body.
The product, which is the result of efforts made at a knowledge-based company, has received approval from the Iran Nanotechnology Initiative Council (INIC), reports Mehr News Agency.
Polymer materials can be easily contaminated with bacteria or fungi, which could result in the transmission of diseases and serious infection. An active antibacterial agent such as silver nano-particles can be used inside the structure of polymer materials to keep them from being infected by microbes. To that end, the new product was developed by local researchers.
Polyester is a kind of polymer with robust fabric, low water absorption property, and the least degree of shrinking when in contact with water compared to other types of industrial fabric.
This material is widely used in the garment industry.
Iranian researchers produced the antibacterial strings using silver ions and its combinations, which are deadly to a whole variety of bacteria.
Polyester strings made with the use of nanotechnology cause the least degree of poisoning for human body. The strings are made with silver nano-particles. Using different forms of silver is one common way of protection against bacteria.
Using silver nano-particles during the process of producing strings will make the particles entrapped within the strings, creating a long-lasting antibacterial property.
Prices of five large-volume commodity resins generally were trending flat-to-down in April and into May and possibly this month—except for PET, which was on the way up in May. In the case of PET, higher crude-oil prices had driven PET feedstock prices up. As for the other four resin families, key drivers were improved supply; a drop in feedstock costs—dramatic in the case of ethylene; and, in some cases, domestic and export demand that didn’t meet expectations due to weather and other issues through much of the second quarter. Prices of PP could also buck the trend somewhat, as suppliers aimed for margin-expansion increases after a double-digit price decline.
These are the views of purchasing consultants from Resin Technology, Inc. (RTi), Fort Worth, Texas; CEO Michael Greenberg of the Plastics Exchange in Chicago; and Houston-based PetroChemWire (PCW).
PE PRICES FLAT OR LOWER
Polyethylene prices were flat in April and were largely expected to remain flat or go lower. Suppliers pushed unsuccessfully to implement their March 3¢/lb price hike in April, with at least one delaying it to May 1, while there was market talk of lower prices last month. Mike Burns, RTi’s v.p. of client services for PE, ventured that May PE prices would likely drop 2-4¢/lb.
PCW reported PE spot prices as flat to lower and characterized supply as balanced for most grades, except for certain LDPE and HMWPE film resins. PCW also reported that domestic spot buyers were inactive, but that underlying dem and was good. The Plastics Exchange’s Greenberg put it this way: “Buyers were quiet, sensing no real threat of rising prices as suppliers pushed off their April increase, shedding doubt on any success in May.”
Both PCW and Burns noted that PE plants were operating at good rates—low 90% range—with inventories building as a result. “I don’t think a price hike can be achieved for the rest of the year, barring oil prices spiking significantly, meaning 10-15% or $7-10/bbl above current prices—or false demand in the third quarter due to pre-hurricane season, or actual hurricane-related production disruptions.” He also noted that there will be a noticeable improvement in resin availability beginning in the third quarter. “Most suppliers will have caught up from hurricane Harvey disruptions and post-hurricane unplanned outages.”
Oil prices, which have driven PE pricing trends, have increased 30% or $15/bbl in the past year. Natural gas prices were 10% lower during the same time period. Spot ethylene prices hit a new low of 13¢/lb by the end of April, after three straight weeks of prices near 10-year lows, according to Burns. Meanwhile, since July of last year, processors with contract negotiation opportunities saw their prices increase 5-7¢/lb, and for others, as much as 11¢/lb. Burns ventures that PE suppliers’ margins grew to about 30¢/lb as their costs didn’t go up.
PP PRICES BOTTOM OUT
Polypropylene prices in April generally were flat to down 1¢/lb in step with propylene monomer contracts. Though some industry sources reported a 1¢/lb margin expansion increase at some accounts, RTi’s v.p. of PP markets Scott Newell maintained that such occurrences were not widespread, and said he saw April PP prices dropping by 1¢ with the monomer in most cases.
PCW reported that spot PP prices were higher amid tight supply and healthy demand. Similarly, Greenberg reported high activity at the end of April, venturing that buyers were recognizing upward pressure on contract pricing and aimed to secure material beyond their current needs. All three sources reported that spot monomer prices began to move up due to planned and unplanned outages that have kept supply snug. Newell ventured that May monomer contracts had the potential to settle 1-2¢/lb higher.
For PP, Greenberg said some of the 3-5¢/lb margin-expansion increase will likely take hold in the second quarter, despite a steady flow of fresh offers on the spot market. Newell ventured that in addition to the potential monomer increase, PP suppliers could get a 1-2¢ margin expansion in May. “When I look at the PP market fundamentals, I don’t see the market supporting an increase. So far this year, demand as been flat to slightly down. In fact, we have had an eight-month run of below-average demand.” While he expected fairly decent demand for May, Newell rejected industry reports that the market is very snug: “The market is not loose but it’s not too tight either—and the numbers simply do not show the purported tightness.” Plant operating rates in first quarter were only 84-85%, yet there was a supplier inventory buildup of 70 million lb. PP imports have been above average since Hurricane Harvey, which accounts for a piece of the lost domestic demand. Newell saw about 1.2% negative domestic growth in the first quarter. He noted that supplier inventories are a well-balanced 31.3 days.
PS PRICES DOWN
Polystyrene prices were flat in April and several suppliers notified customers of 2-4¢/lb decreases for May 1, according to RTi’s Kallman. Both Kallman and PCW attribute the downward trend to a couple of key drivers. First, feedstock prices had dropped significantly—on the order of 6¢/lb. Benzene contract prices dropped from a peak of $3.30/gal in December to $2.93/gal in May. Ethylene spot prices plummeted from around 27¢/lb in early January to 13¢/lb in the last week of April. Late-settling ethylene contracts were expected to be down by 2¢/lb. And styrene monomer spot prices had returned to early January levels by May, according to PCW. Moreover, the strongest season for PS consumption saw weather-related delays while supply was well balanced. For this reason, Kallman ventured that PS prices this month, following the May decreases, were likely to be flat, and suppliers need to share more of the lower feedstock costs with the market.
PVC PRICES DOWN TO FLAT
PVC prices were reported by one industry index to have dropped by 2¢/lb in April—nixing out the March increase, though it appeared to be somewhat of a mixed bag, more like flat-to-down, according to Mark Kallman, RTi’s v.p. of client services for engineering resins, PS and PVC.
Kallman predicted PVC prices in May would be flat-to down and to stabilize this month, as seasonal demand for PVC was expected to be robust. Both Kallman and PCW cited ample supply, lower feedstock costs, particularly ethylene, and a drop in exports through the second quarter for the soft pricing trend.
However, Kallman noted that PVC suppliers’ operating rates are up in the 90% range since March due to low feedstock costs and are expected to remain there, with both domestic and export demand strengthening.
PCW reported that pipe converters had supported both the February and March price hikes in the expectation that it would allow them to push up pipe prices. In contrast, those not in the pipe side of the business felt the March 2¢/lb increase should never have been implemented, as both ethylene prices and PVC export prices were dropping in March.
PET PRICES UP
PCW reported that domestic bottle-grade PET resin prices in April were steady at March levels of about 73¢/lb truckload and railcar delivered Midwest. At the same time, higher crude-oil prices in April pressured PET feedstock prices higher. This was expected to result in domestic PET prices rising 2-3¢/lb in May—especially for monthly contracts tied to average feedstock costs.
Meanwhile, U.S. PET import prices stood at 70-71¢/lb delivered duty-paid (DDP). These prices were also rising by the end of April, due to antidumping (AD) duties imposed on PET imports from Brazil, Indonesia, South Korea, Pakistan, and Taiwan—which accounted for about 40% of PET imports in 2017.
The U.S. Commerce Dept. announced on May 1 that it had imposed these AD “margin” rates as follows: Brazil, 24.09-226.91%; Indonesia, 13.16%; South Korea, 8.81-101.41%; Pakistan, 7.75%; Taiwan, 9.02-11.89%. Cash deposits equaling the assigned percentage of the value of a given load must be posted with U.S. Customs and Border Enforcement before being cleared for entry.
Gulf between Brent and and WTI at widest in more than 3 years ahead of June 22 Opec meeting
Fareed Rahman, Senior Reporter
Abu Dhabi: A rise in US shale production and plans by the Organisation of Petroleum Exporting Countries (Opec) to gradually ramp up production are both expected to have a bearish impact on oil prices, analysts have said.
Russia and Saudi Arabia announced last week that they were considering lifting production to replace the involuntary loss of around 600,000 barrels per day of crude from Venezuela and Angola since the current production cut deal was introduced at the beginning of 2017.
Ehsan Khoman, director, head of research and strategist for the Middle East & North Africa (Mena) at MUFG Bank, said they remain committed to their structurally bearish medium-term oil price thesis due to rise in shale production and Opec plans to raise production in an effort to stabilise oil prices.
“First, the transformative impact that the shale revolution has had, and will continue to have, remains the key game changer on global oil supplies,” he said, adding that faster learning rates, productivity gains, lower tax rates, project redesigns as well as access to low-cost funding will continue to drive engineering cost deflation in the shale industry.
He also said Opec’s exit strategy, through the gradual phasing in of production cuts, will further raise market imbalances, with supply growth outstripping demand growth once again, prompting fundamentals to add further downward pressure on prices.
Oil prices were trading lower when markets closed on Friday. Brent, the global benchmark, was down 0.99 per cent to trade at $76.79 (Dh282) per barrel while West Texas Intermediate (WTI) was at $65.81 per barrel, down 1.83 per cent.
Ole Hansen, head of commodity strategy at Saxo Bank, said the recent decision to work towards increasing production came after the first signs of rising crude oil prices began threatening to hurt demand.
In a report last month, the International Energy Agency said that there would be a slowdown in global demand growth in the second half of 2018, largely due to higher oil prices.
“The negative demand growth impact of rising crude oil prices could potentially make it easier to sell the idea of raising production to other members of Opec [and] non-Opec when they all meet in Vienna on June 22,” Hansen said.
“While crude oil could be settling into a range [as] we await the decision, the gulf between Brent and WTI crude continues to widen. The spread between the two global benchmarks now exceeds $10 per barrel — the widest in more than three years.”
Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices
Saudi Arabia May Raise Asia Official Oil Prices
The OSP hike follows signs of increased demand for Middle East crude oil.
Top oil exporter Saudi Arabia may raise the official selling price (OSP) for most of the crude grades it sells to Asia in July for a second month, possibly raising flagship Arab Light to its highest since February 2014, trade sources said on Friday.
The OSP hike follows signs of increased demand for Middle East crude, as refiners gear up for the peak summer oil consumption period and increased buying by Royal Dutch Shell during the price assessment window operated by S&P Global Platts last month, Reuters reported.
The premium between first- and third-month cash Dubai benchmark prices widened by 40 cents a barrel during April-May. This backwardation, or when prompt prices for a commodity are higher than those in future months, indicates rising demand for prompt supplies.
Dubai’s strength may mean Arab Light’s OSP for July could rise by as much as 40 cents a barrel to as much as $2.30 a barrel above the average Oman and Dubai quotes published by Platts, from $1.90 in June, according to a Reuters survey of five refiners and traders.
That would be the highest Arab Light OSP since February 2014 when it was set at $2.45 a barrel, Reuters data showed.
Still, four of the five respondents are hopeful the July price hike will be smaller than 40 cents because of lower jet fuel margins and as a big price hike would make Arab Light uncompetitive against Middle East and Russian grades of similar quality.
“I recommend Saudi to keep the Arab Light price the same because they (unexpectedly) raised the price in May,” a crude buyer at a North Asian refiner said.
Asian refiners are also buying record volumes of US crude for arrival in the third quarter to replace Middle East, Russian and African oil after US benchmark grade West Texas Intermediate fell to the widest discount against Brent since early 2015.
In contrast, higher fuel oil margins last month and falling Venezuelan production are supporting higher OSPs for heavier grades.
The July OSP for Arab Heavy crude could rise by between 40 and 50 cents a barrel, narrowing the price spread between light and heavy grades, the respondents said.
Saudi crude OSPs are usually released around the fifth of each month and set the trend for Iranian, Kuwaiti and Iraqi prices, affecting more than 12 million barrels per day of crude bound for Asia.
State oil giant Saudi Aramco sets its crude prices based on recommendations from customers and after calculating the change in the value of its oil over the past month, based on yields and product prices.
Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices Saudi Arabia Raise Asia Oil Prices
Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG
Asian styrene driving downstream ethylene margin despite PE/MEG falls
Solid styrene demand in Asia is lending support to downstream ethylene margins against the backdrop of falling polyethylene and monoethylene glycol margins, market data showed Thursday.
Styrene margins on Thursday were calculated by S&P Global Platts at plus $192/mt, down $10.20 day on day but still hovering at around their highest since September 2017.
On Thursday, the FOB Korea styrene monomer maker was assessed up $5 day on day at $1,429/mt as prompt demand for styrene emerged strongly this week ahead of end-month futures clearance, market sources said.
Chinese SM prices soared to a year-to-date high on inventory data released on Wednesday, with trader stocks estimated at just 26,000 mt Wednesday, plunging 51.9% week on week to hit a fresh year-to-date low.
Market participants said that with prompt styrene supply already tight because of several turnarounds in East China, traders that took up short positions previously had no choice but to come out buying over the past two days, especially if they are short delivering into the domestic Huaxicun Commodity Exchange’s contracts.
Production of 1 mt of styrene monomer typically requires 0.8 mt of benzene and 0.3 mt of ethylene, industry sources said.
Despite a bullish SM market, both downstream PE and MEG markets were bearish, with LLDPE and MEG CFR prices falling, Platts data showed.
MEG CFR China prices, relative to ethylene CFR NE Asia, had a negative spread of $54/mt Thursday, the lowest since March. Similarly, the spread between LLDPE butene and ethylene was negative, at minus $160/mt Thursday, the lowest since April.
On Thursday, the CFR China MEG price rose $5 day on day to be assessed at $905/mt, while the CFR Far East Asia LLDPE price was assessed unchanged from Wednesday at $1,180/mt Thursday.
Despite downstream margin pressures, the ethylene cash margin remains at a high, with the spread between naphtha and North East Asia ethylene prices at $677.75/mt Wednesday, the highest since the end of April.
On Thursday, the ethylene-naphtha spread dropped $7.62 day on day to be calculated at $670.13/mt, Platts data showed.
Looking ahead, this may increase further as ethylene supply is expected to tighten in June.
Japan’s JXTG Nippon Oil & Energy will will shut one of its steam crackers in Kawasaki over June 8-19 to conduct repair work, sources close to the company said Wednesday. The company has two steam crackers in Kawasaki. The cracker to be shut in June is able to produce 404,000 mt/year of ethylene.
Added to this is Formosa’s Mailiao naphtha fed steam cracker going offline over June 6-July 17. The cracker has a capacity of 700,000 mt/year, and will result in 18% of cracker capacity in Taiwan going offline during the period.
However, sources said that requirements for naphtha could continue to be supported as most naphtha-fed steam crackers are operating at high run rates.
Physical naphtha raced to an over three-year high of $702.375/mt, CFR Japan, on May 22, before falling back to $662.25/mt at the Asian close Wednesday.
On Thursday, the CFR Japan naphtha price rose $7.63 day on day to be assessed at $669.88/mt.
Sources said the recent slip in naphtha prices combined with the movements on the underlying crude markers. Front-month ICE Brent futures saw a similar parallel dip to $75.47/b at Platts 16:30 Singapore time Asian close Wednesday from a near-four-year high of $79.82/b on May 22.
On Thursday, front-month ICE Brent futures were assessed at $77.25/b.
Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG Asian styrene ethylene PE MEG