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The Commodities Feed: Further pressure on OPEC+ laggards

Energy Oil strengthened yesterday, with ICE Brent breaking back above US$43/bbl, following the OPEC+ Joint Ministerial Monitoring Committee (JMMC). The Saudis put renewed pressure on members who are falling short of the deal, to hit compliance, as well as compensate for their lack of compliance so far. The JMMC supported the request of several of these laggards to extend the period for compensatory cuts through until the end of December 2020. The UAE, which has produced above its quota for the last 2 months, has said that it will not ...

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Asia benzene buoyed by firm crude; arbitrage window to US still shut

Asia’s benzene market was bolstered by firm crude oil futures, following US offshore production shutdowns from Hurricane Sally. Spot benzene prices rose above $415/tonne FOB (free on board) Korea, after receiving a shot in the arm from buoyant crude, from around $406.5/tonne FOB Korea in the first half of the week. Brent crude futures topped $42/bbl, after slipping under $40/bbl recently, as US crude stocks declined. The uptick in benzene prices, however, appeared to be still tempered by ample availability in Asia. “The market is slightly firmer, the crude oil ...

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Brazilian biodiesel trade moving toward open market with limited spot buying

Brazilian fuel distributors will be able to buy 20% of their total demand for biodiesel in the spot market, while 80% of the volume supplied will need to be “social fuel” produced by small-scale farmers, allowing spot market purchases and imports for the first time, the Brazilian Ministry of Mines and Energy has said. According to a statement released Sept . 16 by the ministry’s Abastece Brasil (Supplying Brazil) commission, Brazilian biodiesel trading would switch to a partial open market from an auction market as of Jan. 1, 2022. The ...

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Pandemic to trim China’s 2020 gas demand growth to 4.2%: government report

China’s natural gas consumption is expected to grow at 4.2% in 2020, the slowest pace in five years, a government research report said, after the coronavirus pandemic slowed economic activity and dented demand for energy. Demand for natural gas grew just 1.5% in the first half, the report by the oil and gas department at the National Energy Administration said, forecasting total 2020 consumption of 320 billion cubic metres (bcm). The report forecast China’s natural gas output this year at 189 bcm, up 9% from 2019, while natural gas imports ...

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OPEC must continue working with its non-Opec allies to overcome downturn, says MEED, part of GlobalData

Amid oil price volatility, expanded producers’ agreements and questions about the long-term outlook for oil, Opec is celebrating its 60th birthday this week. Opec’s ability to emerge from adverse situations and perform its fundamental task of balancing the global oil market and securing favorable price levels for its members has kept the entity both relevant and efficient six decades on, says MEED, part of GlobalData. Opec’s 60-year journey has been filled with crises and episodes that have repeatedly struck at its very existence. Since its formation, the oil producers’ group ...

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Positive sign: India’s petroleum sales rise for first time in six months

Indian gasoline sales rose for the first time since the nation imposed one of the world’s strictest virus lockdowns in late March, a positive sign for global oil markets amid a stalling energy demand recovery. Sales at India’s three biggest fuel retailers climbed 2.2% in the first half of September, the first year-on-year increase in six months, according to preliminary data from officials with direct knowledge of the matter. The uptick in gasoline sales in the world’s third-largest oil importer is a welcome development for a global market that’s been ...

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Growth across major Asian economies to drive petrochemicals demand in the region, says GlobalData

COVID-19 pandemic has significantly impacted the global economy in 2020. Growth across key Asian economies is expected to rebound in 2021, as the containment measures and stimulus packages are likely to increase economic activities and drive petrochemicals demand in the region, says GlobalData, a leading data and analytics company. John Paul Somavarapu, Oil and Gas Analyst at GlobalData, comments: “The regional capacity additions are largely concentrated in China, targeting self-sufficiency to meet the country’s existing and growing petrochemicals demand. China is followed by India and Indonesia, also capitalizing on their ...

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Oil refiners shut plants as demand losses may never return

Oil refiners are permanently closing processing plants in Asia and North America and facilities in Europe could be next because of the uncertain prospects for a recovery in fuel demand after the coronavirus pandemic cut consumption. The pandemic initially cut global fuel demand 30% and refiners temporarily idled plants. But consumption has not returned to pre-pandemic levels and lower travel may be here to stay, leading to the possibility plants may shut permanently. Here are some of the companies/refineries involved: * Australia has proposed offering incentives worth A$2.3 billion ($1.68 ...

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Libya’s NOC demands demilitarization of oil sector as talks to restart output continue

Libya’s state-owned National Oil Corp. reiterated on Sept. 18 that it will not lift force majeure on crude exports from the blockaded oil terminals unless these facilities are demilitarized. This statements come amid reports that talks between the UN-backed Government of National Accord and the self-styled Libyan National Army brokered by Turkey and Russia were making progress. Sources also told S&P Global Platts that negotiations to restart the bulk of Libya’s crude output and end the eight-month long blockade on the country’s oil exports were continuing, with the issue of ...

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US storms buoy Asian transport fuels amid shaky fundamentals

The arrival of hurricane season in the US has injected some much needed fresh support for Asia’s transportation fuels markets, as crack spreads and cash differentials receive a boost in light of persistently lagging fundamentals. On the gasoline front, the FOB Singapore 92 RON gasoline crack spread against front-month ICE Brent crude futures jumped to a three-month high of $4.31/b at the Asian close on Sept 15, last higher on June 24 at $4.83/b, Platts data showed. For gasoline, the strength comes, in part, from the steady US RBOB/Brent crack, ...

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API’s August Monthly Statistical Report Shows U.S. Energy Markets are Rebalancing, Remain Fragile

The U.S. returned to being a net energy exporter in August despite disruptions from Hurricane Laura and ongoing uncertainty over the pandemic, according to data released today in the American Petroleum Institute’s August 2020 Monthly Statistical Report and Q3 2020 Industry Outlook. Higher demand and lower supply translated into lower crude oil inventories and further illustrated the gradual rebalancing of the market. “Although the market remains fragile, we saw substantive progress in August towards the rebalancing and normalizing of key indicators,” API Chief Economist Dean Forman said. “The U.S. return ...

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International lenders back $9.5 billion financing for Russia’s Arctic LNG 2 – document

International lenders have lined up about $9.5 billion in financial support for a Russian Arctic liquefied natural gas (LNG) project, a document seen by Reuters showed, even as such projects come under greater scrutiny over climate concerns. The $21 billion project, which received final investment approval a year ago, is expected to be launched in 2023 and to reach its full capacity of almost 20 million tonnes per year in 2026. While the energy industry touts natural gas as a cleaner alternative to coal or crude, it is a source ...

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US working natural gas volumes in underground storage rise by 89 Bcf: EIA

Total additions to US natural gas in storage last week surprised to the upside, prompting a selloff in the Henry Hub prompt futures market with a much smaller declines seen for the winter 2020-21 contracts. Storage inventories increased by 89 Bcf to 3.614 Tcf for the week ended Sept. 11, the US Energy Information Administration reported the morning of Sept. 17. The injection was significantly higher compared with S&P Global Platts’ survey of analysts calling for a 77 Bcf build. Responses to the survey ranged from an injection of 68 ...

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Deal agreed to resume Libyan oil output, NOC still to lift force majeure

Two rival groups in Libya -– the UN-backed Government of National Accord and the self-styled Libyan National Army -– have agreed to reopen key oil ports, signaling the possible restart of more than 1 million b/d of crude. But sources close to the matter said Sept. 18 that state-owned National Oil Corporation was still to agree some of the terms of the deal. A spokesman at NOC declined to comment. The news of a return of Libyan barrels to a market already awash with crude hit oil prices. At 1310 ...

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More than 30% of US Gulf offshore oil still offline after Hurricane Sally

More than 30% of US Gulf of Mexico offshore oil and 25% of natural gas output remained offline Sept. 17 after Hurricane Sally made landfall the day prior, according to the US Bureau of Safety and Environmental Enforcement. Oil producers began to redeploy evacuated crews, but even more oil was reported shut in than on previous days. Crude producers have shut in 567,770 b/d of crude and 670 MMcf/d of gas output, 30.69% and 24.73% of total offshore US Gulf output, respectively. A total of 70 platforms and rigs were ...

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