The Chemical Company Crude Oil

Crude Oil Inventories & Price in 2018: High Prices, Immediate Impacts

In early January 2018, oil prices hit their highest levels in more than three years. “U.S. crude oil inventories are at their lowest level since August 2015. OPEC is getting closer to its target of reducing OECD industrial stocks to the five-year average,” says PVM Oil Associates analyst Tamas Varga.

The Chemical Company Crude Oil

Data from the U.S. Energy Information Administration showed that crude inventories fell by almost 5 million barrels to 419.5 million barrels in the week of January 5, 2018. This drop is likely due to the extreme cold weather that stopped some onshore output in North America, which was expected to be short-lived. Production cuts led by OPEC and Russia that started in January 2017, and are set to continue throughout 2018, have underpinned charges. There is still downward pressure in the physical market, where the second and third largest OPEC producers have cut their prices to remain competitive.

The oil price decline that began mid-2014, when the price of oil was consistently over $110/bbl, has changed the fundamental economics of the global chemicals industry, and has brought about widespread uncertainty. Additional supply from North American shale oil and continued high production levels from OPEC are likely to make a slow but steady recovery.

Nonetheless, prices will need to recover over time to permit investment in production and exploration. Over the past ten years, oil prices have gone through at least two complete cycles, and more significant swings are likely to happen. During this time of ever-changing prices, setting short and mid-term plans will continue to be necessary.

Oil is one of the key ingredients in the manufacture of various chemicals and related products. Consequently, many chemical firms benefit from lower crude oil prices. However, companies using natural gas as opposed to oil for their feedstock do not enjoy those benefits, resulting in the cost of natural gas affecting chemical firms more than the price of oil in those cases.

Additionally, a substantial decline in crude oil prices would impact the market in other ways. It makes the economics of petroleum substitutes a great deal less attractive, including bio-based and battery chemicals. This issue is causing companies, from global powerhouses to niche firms, to reevaluate their strategies.

 

 

Sources:
https://www.cnbc.com/2018/01/10/oil-markets-near-3-year-highs-on-tighter-us-market.html
https://www.icis.com/resources/news/2018/04/10/10210537/us-on-pace-for-record-oil-natgas-production-in-2018/

Weekly Market Update: April 9-13, 2018

TCC’s Weekly Raw Materials Update: April 9-13.

Ethylene

Spot ethylene steadies this week at 14.25cpp

45-day weighted average: 15.653cpp
Compared to March average: 19.887cpp

Benzene

Spot ends the week flat, $2.94/gal DDP HTC

US higher than Europe and Asia

Propylene

RGP
Spot PGP up slightly, to 43.75cpp

RGP
Spot RGP trades up to 33.5cpp

Polypropylene

Prices flat-to-higher, supply remains tight with strong demand
PP operating rates rebounding to 93.5%

Polyethylene

Flat-to-lower this week
Supply of some grades show signs of loosening
LLDPE relatively available
HDPE BM shows flat availability
LDPE film, HMWPE film remain tight

Polystyrene

Prices steady this week, limited spot activity, relatively good availability

Crude Oil

Higher this week

Monday: $63.42/bbl
Fri: $67.39/bbl
Last Fri: $62.06/bbl
(May NYMEX WTI Crude)

Natural Gas

Higher this week

Mon: $2.693/mmBtu
Fri: $2.735/mmBtu
Last Fri: $2.701/mmBtu
(May NYMEX Natural Gas)

Weekly Market Review

TCC produces weekly market review graphics, with content courtesy of PetroChem Wire. This information is distributed via TCC’s social media pages, including Facebook, Twitter, LinkedIn and Instagram, as well as posted to The View section of the website, and occasionally published via email with other market updates.

Weekly Market Update: April 2-6, 2018

TCC’s Weekly Raw Materials Update: March 26-29.

Ethylene

Spot ethylene hits new lows this week
Traded Friday at 14.25cpp

Benzene

Spot was higher this week
Ended up 2cpg, to 296cpg ($885/mt)

Propylene

PGP
Spot Mar PGP steady at 42cpp

RGP
Spot Mar RGP bid higher, no new trades
Spot RGP ~ 29.5cpp

Polypropylene

Prices steady with tight availability for most grades

Polyethylene

HDPE BM HIC for export ended the week at 57cpp
LDPE film steady Friday at 55cpp
Domestic demand strong for HDPE, LDPE and LLDPE

Polystyrene

Prices firm this week, limited spot supply for HIPS and GPPS

Crude Oil

Lower this week

Monday: $63.01/bbl
Fri: $62.06/bbl
Last Fri: $64.94/bbl
(May NYMEX WTI Crude)

Natural Gas

Flat-to-lower this week

Mon: $2.683/mmBtu
Fri: $2.701/mmBtu
Last Fri: $2.733/mmBtu
(May NYMEX Natural Gas)

Weekly Market Review

TCC produces weekly market review graphics, with content courtesy of PetroChem Wire. This information is distributed via TCC’s social media pages, including Facebook, Twitter, LinkedIn and Instagram, as well as posted to The View section of the website, and occasionally published via email with other market updates.

U.S. / China Tariffs Create Unrest Among Chemical Industry

US / China Tariffs Create Unrest Among Industry.

Consistent back-and-forth tariff announcements over the past two weeks between President Trump and China have the global marketplace on edge, fearing potential trade war inclinations and potential impacts across markets for years to come. Trump’s original tariff on steel and aluminum were aimed to incentivize U.S. companies to buy steel and aluminum from U.S. producers, strengthening the U.S. metal industry.

China’s rebuttal tariffs in March and April primarily target high-value American exports, from airplanes to soybeans.

Although many of the affected products target consumers, the potential impact of continued and ongoing tariffs will likely make its way up the supply chain and reach the petrochemical and derivative markets.

Timeline:

March 8: Trump imposes 25% tariff on steel and 10% on aluminum for China.

March 22: Trump announces tariffs on an additional $50 billion of Chinese goods in response to the alleged theft of intellectual property from U.S. companies. At this time, Trump gave the U.S. Trade Representative (USTR), Robert Lightizer, a maximum of 15 days to draft a list of targeted products.

March 23: China retaliates, announcing $3 billion in duties on 128 products, ranging from 15–25%.

April 3: USTR releases their list of 1,300 affected products, including flat-screen TVs, medical devices, aircraft parts and more.

April 4: Hours after the U.S. publishes the list of imports subject to new duties, China responds with an additional $50 billion in U.S. tariffs, affecting 106 totals.

Brief List of Impacted Plastic Materials & Products:

Primary Shaped Polycarbonate
Polyethylene, with a primary shape specific gravity of less than 0.94
Acrylonitrile
Primary Shaped Epoxy Resin
Polyethylene Terephthalate Plate Film Foil Strips
Some primary vinyl polymers
Some primary shapes of acrylic polymers
Some primary shapes of pure polyvinyl chloride
Adhesives based on other rubber or plastics
Polyamide-6,6 slices
Some primary-shaped polyethers

Links to read more:

Bloomberg: Tariffs stick it to U.S. Manufacturers

Washington Post: Trump Pushes Back on Fears of a Trade War with China

Weekly Market Update: March 26-29, 2018

TCC’s Weekly Raw Materials Update: March 26-29.

Ethylene

Spot ethylene saw a slight rebound
Ended the week at 17.25cpp

Ethylene down overall for March
March spot began the month at 22cpp

Benzene

Range-bound this week, no new trades
Mar: 292cpg DDP HTC
Apr: 289-295cpg DDP HTC
May: 288-294cpg DDP HTC

Propylene

PGP
Spot Mar PGP trades at month low, 42.75cpp

RGP

Spot Mar RGP steady at 29.5cpp

Polypropylene

Prices mostly unchanged, relatively quiet end of the month
April prices remain uncertain, depending on monomer contracts

Polyethylene

Flat-to-lower, spot trading quiet this week
LDPE, LLDPE spot availability expected to improve
HDPE BM and HMWPE likely to stay tight

Polystyrene

Prices steady, limited spot activity this week

Crude Oil

Lower this week

Monday: $65.55/bbl
Fri: $64.94/bbl
Last Fri: 65.88/bbl
(May NYMEX WTI Crude)

Natural Gas

Lower this week

Mon: $2.657/mmBtu
Fri: $2.773/mmBtu
Last Fri: 2.633/mmBtu
(May NYMEX Natural Gas)

Weekly Market Review

TCC produces weekly market review graphics, with content courtesy of PetroChem Wire. This information is distributed via TCC’s social media pages, including Facebook, Twitter, LinkedIn and Instagram, as well as posted to The View section of the website, and occasionally published via email with other market updates.

Crude Oil Futures Above $65/barrel

Crude Oil barrel prices jumped 3% on Wednesday, ticking above $65/bbl for the second time in 2018. Crude was last over $65 at the end of January, moving down below $60 in February before rebounding this week.

As of 4:00PM ET, Crude Oil was priced at $65.52/bbl, up 3.11% on the day, according to ino.com.

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Weekly Market Update: March 12-16, 2018

TCC’s Weekly Raw Materials Update: March 12-16.

Ethylene

Mar spot ethylene trades down to 17.5cpp
Rebounds up to 18cpp

45-day average is 1.632cpp lower than Feb

Benzene

Mar ended the week down to 295cpg DDP HTC

Apr: 295-301cpg DDP HTC
May: 293-300cpg DDP HTC

Propylene

PGP
Spot Mar PGP trades down to 44cpp

RGP

Spot Mar RGP steady at 29.5cpp

Polypropylene

Prices mostly steady, market waiting for a monomer contract settlement
Bulk rail: Mar HoPP IM/raffia for export 55cpp railcar FOB Houston
HoPP IM FOB Chicago unchanged at 59cpp
Low-end offgrade CoPP for export ~ 49cpp railcar FOB Houston

Polyethylene

Prices flat to lower, limited spot activity
Tight availability for HDPE BM and film grades
LLDPE film availability improvd
Some HDPE IM and LDPE frac melt availability was seen

Polystyrene

4cpp increase on prime continued for March
Tight monomer supply, seasonally strong demand
Supply remains tight due to low quarterly operating rates

Crude Oil

Higher this week

Monday: $61.36/bbl
Fri: $62.34/bbl
Last Fri: 65.49/bbl
(Apr NYMEX WTI Crude)

Natural Gas

Lower this week

Mon: $2.778/mmBtu
Fri: $2.688/mmBtu
Last Fri: 2.732/mmBtu
(Apr NYMEX Natural Gas)

Weekly Market Review

TCC produces weekly market review graphics, with content courtesy of PetroChem Wire. This information is distributed via TCC’s social media pages, including Facebook, Twitter, LinkedIn and Instagram, as well as posted to The View section of the website, and occasionally published via email with other market updates.

DINP Reproductive Toxicity Classification Rejected by ECHA

The European Chemicals Agency’s Risk Assessment Committee (RAC) has concluded that no classification is required for reproductive toxicity for DINP after a lengthy research and analysis period(1,2). The ECHA concluded that there is no required classification regarding issues surrounding fertility and/or development.

The debate surrounding DINP classification was originally submitted by Denmark in 2015(1), leading to a large-scale scientific and industry debate on the proposal and potential hazards of the material.

The 6-page ECHA news release annex, 369-page review report and article from the European Plasticizers trade association are available here and linked below.

 

Weekly Market Update: February 26 – March 2, 2018

TCC’s Weekly Raw Materials Update: February 26 – March 2.

 

Ethylene

February spot ends the month at 22.125cpp
Mar spot starts, trades down to 21.25cpp

Feb 45-day weight average for TX/LA: 23.19cpp
Jan average was 47.884cpp

Benzene

Mar ended the week down to 303cpg

Mar: 301-305cpg DDP HTC
April & May: 302-306cpg DDP HTC

Propylene

PGP
Spot Mar PGP trades up to 44.5-45cpp
US PGP still below Asia (FOB Korea and CFR China) and Europe

RGP
Spot Mar RGP up to 29.5cpp

Polypropylene

Limited spot activity this week
Market awaiting clarity on Mar propylene values

Polyethylene

Prices firm, tight spot availability

Polystyrene

US PS producers announce 4cpp increase in March
Follows a 2cpp hike in February
Tight styrene monomer supplies, rising butadiene rubber costs believed to be the causes

Crude Oil

Lower this week

Monday: $63.91/bbl
Fri: $61.25/bbl
Last Fri: 63.55/bbl
(Apr NYMEX WTI Crude)

Natural Gas

Higher this week

Mon: $2.686/mmBtu
Fri: $2.695/mmBtu
Last Fri: 2.657/mmBtu
(Apr NYMEX Natural Gas)

Weekly Market Review

TCC produces weekly market review graphics, with content courtesy of PetroChem Wire. This information is distributed via TCC’s social media pages, including Facebook, Twitter, LinkedIn and Instagram, as well as posted to The View section of the website, and occasionally published via email with other market updates.