Prudential Securities: European heat wave could reduce market supplies of chemicals, refined products


By OGJ editors
HOUSTON, Aug. 18 -- A European heat wave has began to restrain chemical and refining operations, and one analyst says that if the heat wave continues and more plants reduce operating rates then market supplies possibly could become reduced.

Prudential Securities Inc. analyst Andrew F. Rosenfeld of New York said this emerging trend potentially could provide a "small positive" for the global chemical and refining industry. His comment came in an Aug. 14 research note.

The heat wave has reduced water levels on some river and lakes. BASF AG and Veba Oil, Refining & Petrochemicals GmbH (VOPR), both of Germany, have declared "force majeure" on a portion of their ethylene production.

BASF said the "force majeure" was due to low water levels and high water temperatures on the Rhine River. VOPR said its outage was caused by mechanical problems.

Both refineries and chemical plants use water as a coolant to help maintain heat balances for steam boilers and other operational requirements. When water is unavailable at the correct temperatures or volume, then it is likely that operating rates must be reduced.

The "force majeure" declaration allows a company to place its customers on allocation without recourse from breach of contract.

"It is likely that the success of the recent August polyethylene price increase in Europe is partially due to this issue," Rosenfeld said. "In regards to the refiners, we believe if the low water levels cause reduced operating rates then exports from Europe to the
US could decline and improve refining margins on the East Coast. European imports have accounted for approximately 25% year-to-date of US total product imports and 3% of total US product demand."

Related Articles

Joint venture advances plan for grassroots refinery in North Dakota

07/30/2015 Quantum Energy Inc., Tempe, Ariz., and a joint-venture partner Native Son Holdings LLC (NSH), The Woodlands, Tex., have filed a minor-source air qu...

Shell to shed Japanese refining assets

07/30/2015 Royal Dutch Shell PLC has entered a deal to sell nearly all of its interest in Japanese refiner Showa Shell Sekiyu KK to Idemitsu Kosan Co. Ltd. as...

BLM seeks comments on proposed Fidelity E&P Utah oil and gas project

07/30/2015 The US Bureau of Land Management is seeking public comments on Fidelity Exploration & Production Co.’s proposed oil and gas project 17 miles no...

Murkowski, Warner want US ready to use energy abundance strategically

07/30/2015 The US should better prepare itself to use its new energy abundance as a geopolitical tool by jettisoning obsolete policies and broadening access f...

Tawke oil flowing despite pipeline blast

07/30/2015 DNO ASA, Oslo, said oil production from Tawke field in the Kurdistan region of Iraq continues despite shutdown of the pipeline that carries Iraqi c...

Gazprom lets contract for Russian gas processing plant

07/29/2015 OOO Gazprom Pererabotka Blagoveshchensk (GPB), a subsidiary of PJSC Gazprom, has partnered with NIPIgazpererabotka (Nipigaz), Moscow, on design and...

Petronas lets contract for Kanowit field FLNG work

07/29/2015 Malaysian state-owned Petronas has let a contract to France’s Technip for the engineering, procurement, construction, installation, commissioning, ...

Construction starts on first phase of Jagdishpur-Haldia gas line

07/29/2015

Construction has begun on the first phase of the Jagdishpur-Haldia natural gas pipeline, also known as the Energy Highway of Eastern India.

Report: Old crack caused Canadian pipe break

07/29/2015 The early-2014 rupture of a natural gas pipeline south of Winnipeg, Man., resulted from a fracture at a crack that formed in the pipe wall during c...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected