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Oil & Gas January 04, 2017 01:00:54 AM

Crude oil prices decline on Friday

Polymers
ScrapMonster Contributor
OPEC deal is set to take effect in a few days, but the promised cuts are not inevitable.
Crude oil prices decline on Friday

SEATTLE (polymers.in):  A crude oil trader informed that prices dropped as the weekly fuel inventory report brought out by the US based EIA stated that crude stockpiles unexpectedly gained 614,000 bbl last week.

Oil prices should be a lot lower than where they are now
- In January, oil prices were melting down, dropping below USD 30/bbl.
- OPEC deal is set to take effect in a few days, but the promised cuts are not inevitable.
- Libya and Nigeria are exempted from the OPEC deal and they have every intention of ramping up production.
- US dollar has strengthened by more than 20% in the past two years. 
- IEA projects oil demand climbing by just 1.3 million bbl/day in 2017.
- Crude oil inventories are still at very high levels, well above long-term averages in both the US and around the world.

US oil rig count rises for 9th straight week to the highest level in a year
- US oil rig count increased by two to 525 in the final week of 2016.
- The gas rig count increased by three to 132.
- WTI crude oil futures were down 0.2% to USD 53.60/bbl. 

The next oil and gas rush could happen in these 2 countries
- According to Cyprus’ Ministry of Energy, Commerce, Industry, and Tourism, it has awarded three offshore blocks, one to Italy’s End and the other to ExxonMobil and Qatar Petroleum.
- Total said it is now planning to spend USD 1 billion/year on Brazil oiled gas projects going forward. 

Hedge Funds Bet Oil Rally to Extend Into 2017 as Output Cuts Hit
- Crude futures settled at the highest in almost 18 months on December 28.
- Hedge funds boosted their net long position by 0.6% in the week.
- WTI increased 3.2% to USD 53.90/bbl in the report week before settling at USD 53.72. 

Oil and Gas Explorers Headed for IPO Are Finding Buyers Circling
- Brigham Resources Midstream LLC agreed to be acquired by Diamondback Energy Inc. for a total deal value of USD 2.43 billion.
- The tail end of this year saw an increase in acquisitions of US oil and gas services and pipeline companies. 

US Stocks Pare Yearly Gain as Dollar, Oil Slip: Markets Wrap
- The S&P 500 Index cut its advance this year to 9.3%.
- The Dow Jones Industrial Average finished the year more than 250 points below 20,000 after climbing within 30 of the mark this week.
- The Stoxx Europe 600 Index rose 0.3%, paring its annual drop to 1.2%.
- Canada’s S&P/TSX Composite Index has rallied 19% in the year for the best performance among 24 developed nation stock gauges tracked by Bloomberg.

Oil Falls First Time in Nine Days as US Crude Supplies Climb
- Crude stockpiles rose 614,000 bbl last week.
- A 1.5 million bbl decline was forecast by analysts surveyed by Bloomberg, and a 4.2 million bbl increase was reported Wednesday by industry funded American Petroleum Institute.

Feedstock (Ethane, Ethylene, Propane, Propylene, PX, PTA, MEG, EDC, VCM)
Tight supplies propel propylene in Asia to 17-month highs
- FOB Korea propylene jumped USD 19/MT from last Friday to USD 870/MT Tuesday.
- CFR China propylene price rose USD 10/MT to USD 920/MT over the same period. 

Demand from North Asia propels Asia's naphtha crack to a 4 week high
- Naphtha crack in Asia naphtha crack rebounded on Tuesday to reach an almost four-week high of USD 74.45/ton.
- Formosa has on December 15 bought the light fuel for H2-January delivery to Mailiao at a discount of about USD 6.50/ton to Japan. 

Sinopec offers Jan paraxylene CP at Yuan 7,200/MT, up Yuan 330/MT from Dec settle
- Sinopec nominated it January contract price for PX at Yuan 7,200 MT, equivalent to about USD 868/MT on an import parity basis based on an exchange rate of 6.9497. 

India's Reliance Industries commissions new PX unit at Jamnagar
- India’s Reliance Industries has commissioned the first phase of a 2.2 million MT/year PX plant at Jamnagar.
- These projects were part of the largest contemporary investment, in excess of Rupee 1 trillion, in refining and petrochemicals sector anywhere in the world.

Polymers Demand
US And China: Into The Unknown on 20 January
- China might accelerate the process of unwinding investment incentives for US companies such as Apple.
- Outsourcing basic assembly jobs to China may no longer be possible for companies such as Apple as China tries to escape its middle-income trap. 

2017: The year the new PE capacity becomes a reality
- Capacity additions from Braskem Idesa, Ineos Sasol and Nova Chemicals will have added more than 4 billion pounds of PE capacity in North America by mid-2017.
- Low 2016 demand growth in the US and Canada will need to be supercharged in 2017. 

New Polyethylene units to drive US ethylene demand
- Derivatives units expected to come online in 2017 ahead of delays in new cracker capacity are boosting spot ethylene prices into the first half of the year. 

Petrochemical makers in Asia switch to LPG amid large discounts to naphtha
- Rising LPG exports from the US at large discounts to naphtha are pointing to the increased use of LPG for Asian petrochemical production in 2017. 

At 6.21 percent, country’s GDP below govt. target
- Vietnam’s GPD rate in 2016 was 6.21%, predictably below the set growth target of 6.7%.
- Vietnam also scored a goods trade surplus of around USD 2.6 billion, an improvement over a trade deficit of around USD 3.5 billion in 2015.

Courtesy: www.polymers.io

 

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