By Polymers (ScrapMonster Contributor)
August 30, 2016 10:57:12 PM
Oil market rebalancing could take until end 2017:
- The potential return to the market of some 1.5 million bbl/day of supply from Nigeria and Libya could push a rebalancing further away.
Oil Discoveries at a 70-Year Low Signal a
Supply Shortfall Ahead
- 2.7 billion bbl of new supply was discovered in 2015.
- Global spending on exploration has been cut to USD 40 billion this year from about USD 100 billion in 2014.
- Drillers found just 736 million bbl of conventional crude as of the end of last month.
Oil Pessimists Exit as OPEC Cap Talk
Spurs Bets Glut Easing
- Futures have climbed 23% in less than three weeks as some OPEC members raised the possibility of an output freeze amid signs the global glut is easing.
- WTI by 66,247 futures and options during the week ended 23 Aug.
- Futures rose 3.3% to USD 48.10/bbl in the report week.
Oil falls towards $49 on high output,
- Oil fell towards USD 49/bbl on Monday.
- Brent crude was 62 cents lower at USD 49.30/bbl.
- The US currency rose to a three-week high against the yen on Monday.
OPEC oil revenue down nearly 50
- US EIA found oil export revenue for OPEC members in 2015 was a collective USD 404 billion, 46% lower than the previous year.
- EIA found that, when adjusted for inflation, net OPEC oil revenue was around USD 6060/person last year.
Mexico’s 2017 Oil Hedges Lock in USD 9.5
Billion Value: Takeaways
- Mexico said it’s locked in the equivalent of USD 9.5 billion of oil revenue for 2017.
- Mexico bought put options that give it the right to sell oil for USD 38/bbl next year based on Mexico’s oil export mix.
- Mexico hedged 250 million bbl of oil via put options.
Feedstock (Ethane, Ethylene, Propane,
Propylene, PX, PTA, MEG, EDC, VCM)
Propylene prices continue to march higher in Asia
- On Friday, FOB Korea propylene prices were assessed up at USD 795/MT levels, a steep week on week rise of USD 40/MT.
- CFR Taiwan prices of propylene were higher at USD 840/MT levels, a sharp increase of USD 35/MT.
- CFR China prices of propylene were assessed up at USD 845/MT levels, a spike of USD 45/MT on the week.
- CFR South East Asia prices of propylene were assessed up at USD 790/MT levels, a week on week surge of USD 45/MT.
NWE Sep ethylene CP initially settled at
EUR 925/MT, unchanged from Aug
- The Sept Northwest European ethylene contract price initially settled at a rollover of EUR 925/MT.
Ethylene-naphtha spread in Asia rises by
over USD 22/MT to peak to 3 month high
- Price spread between ethylene and feedstock naphtha rose by USD 22.05/MT day on day to USD 802.3/MT on Thursday.
- CFR Japan naphtha benchmark dip by around USD 2 day on day to be assessed at USD 397.6/MT.
- CFR Northeast Asia ethylene price spiked by USD 20/MT to a 4 month high of USD 1200/MT.
Indorama receives air permit for restart
of Louisiana ethylene plant
- Indorama has received an air permit for the restart and repair of a dormant ethane cracker near Lake Charles, Louisiana.
- When restarted, the project will have an estimated 370,000 MT/year of ethylene and 30,000 MT/year of propylene production capacity.
China’s One Belt, One Road To Reshape Petchems Trade Flows
- Finding outlets for CHina’s vast oversupply in many industrial sectors.
- Migrating low value manufacturing to other less-developed countries along the One Belt, One Road routes.
- One Belt, One Road will provide much more efficient routes to both domestic and international markets.