Oil steady as virus fears counter positive factory data

Oil pump jacks are seen in McKenzie County, in western North Dakota. Over the past month, Brent crude oil has been trading in a range between $41 and almost $45. (AP/File )
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Updated 04 August 2020

Oil steady as virus fears counter positive factory data

  • Fears over rising COVID-19 cases weigh on market; euro zone manufacturing activity expands modestly

LONDON: Oil prices steadied on Monday as rising COVID-19 cases around the globe and oversupply worries fueled by the prospect of OPEC and its allies winding back output cuts were offset by positive industry data in Europe and Asia.

Brent crude rose 5 cents, or 0.1 percent, to $43.57 a barrel by while US West Texas Intermediate crude gained 6 cents, or 0.1 percent, to $40.33.

Over the past month, Brent has been trading in a range between $41 and almost $45.

“Oil continues to trade in an incredibly rangebound manner,” said Warren Patterson, ING’s head of commodities strategy.

“Speculators appear to be getting more nervous about the demand recovery, with the path much more gradual than market expectations coming into the second half of the year.”

Coronavirus cases have continued to climb in the United States and have reached almost 18 million globally, with more countries imposing new restrictions or extending existing curbs in an effort to control the pandemic. While fuel demand recovers slowly in the face of the resurgence of the virus, investors are also worried about oversupply as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, prepare to ease oil supply cuts from August.

“Concerns appear to be developing that a rise in OPEC+ production will coincide with uneven recovery in oil demand due to localized setbacks following secondary waves of COVID outbreaks,” said Harry Tchilinguirian, head of commodity research at BNP Paribas.

OPEC+ members have been cutting output since May by 9.7 million barrels per day (bpd). From this month cuts will officially taper to 7.7 million bpd until December.

Russian oil and gas condensate output increased to 9.8 million bpd over Aug. 1-2, from 9.37 million bpd in July, a source familiar with data said on Monday.

Oil prices fell earlier in the session but found some support after a survey showed manufacturing activity across the eurozone expanded last month for the first time since early 2019. 

Positive manufacturing data in Asia also helped to support oil prices.

A Reuters poll on Friday indicated that oil is set for a slow crawl upwards this year as the gradual easing of coronavirus-led restrictions buoys demand, though a second COVID-19 wave could slow the pace of a recovery.


Japan receives first shipment of blue ammonia from Saudi Aramco, SABIC

Updated 28 September 2020

Japan receives first shipment of blue ammonia from Saudi Aramco, SABIC

JAPAN: Saudi Aramco and Japan’s Institute of Energy Economics (IEEJ) announced the first shipment of blue ammonia from Saudi Arabia to Japan on Sunday.

The shipment, which was in partnership with Saudi Basic Industries Corporation (SABIC), contained forty tons of high-grade blue ammonia, and is meant for use in zero-carbon power generation.

Saudi Aramco said in a statement that shipping challenges were overcome with 30 tons of CO2 captured during the process designated for use in methanol production at one of SABIC’s facilities and another 20 tons of captured CO2 being used for enhanced oil recovery at Aramco’s field.

Mitsubishi Corporation, which is representing IEEJ’s study team, is working with SABIC to monitor the transport logistics in partnership with JGC Corporation, Mitsubishi Heavy Industries Engineering, Mitsubishi Shipbuilding Co and UBE Industries.

“The shipment is considered the first around the world, and it represents a crucial opportunity for Aramco to introduce hydrocarbons as a reliable and affordable source of low-carbon hydrogen and ammonia,” said Ahmad Al-Khowaiter, Chief Technology Officer, Saudi Aramco, according to Saudi media.

Fahad Al-Sherehy, SABIC’s Vice President of Energy Efficiency and Carbon Management, also said: “At SABIC, we can economically leverage our existing infrastructure for hydrogen and ammonia production with CO2 capture. Our experience in the full supply chain along with integrated petrochemicals facilities will play an important role in providing the world with the blue ammonia.”

Ammonia can help supply the world’s increasing demand for energy through reliable and sustainable methods. 

The Saudi-Japan blue ammonia supply network involved a full value chain; including the conversion of hydrocarbons to hydrogen and then to ammonia, as well as the capture of associated carbon dioxide emissions.