Last updateMon, 19 Aug 2019 4pm

ExxonMobil, SABIC Proceeding with TX Petrochemical Project

ExxonMobil and SABIC are proceeding with the construction of a chemical facility and a 1.8 million metric ton ethane steam cracker in San Patricio County, TX. Economic output is expected to exceed $22 billion during construction and $50 billion during first six years.

The joint venture between ExxonMobil and SABIC, called Gulf Coast Growth Ventures, received final environmental regulatory approval in June 2019. Construction will begin in the third quarter of 2019 and startup is anticipated by 2022.

‘Biggest Change in Oil Market History’ Less Than Six Months Away

“On January 1, 2020, the International Maritime Organization (IMO) will enforce new emissions standards designed to significantly curb pollution produced by the world’s ships,” CNBC reports.

“It is the biggest change in oil market history,” according to Steve Sawyer, senior analyst at energy consultant Facts Global Energy. “It is going to affect crude oil producers, traders, ship owners, refiners, equity investors, insurance companies, logistical businesses, banks… Who’s left? I’m struggling to think of anyone it might not affect. That’s why it is a huge transition.”

Chemical Activity Barometer Flat in June

The Chemical Activity Barometer (CAB) from the American Chemistry Council was flat (0.0% change) in June on a three-month moving average (3MMA) basis, following three monthly gains. On a year-over-year basis, the barometer is up 0.3% (3MMA). The unadjusted measure of the CAB retreated 0.2% in June and fell 0.3% in May. The diffusion index rose to 65% in June.

The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for May was revised downward by 0.38 points and that for April by 0.22 points. Production-related indicators in June were slightly positive.

Oil and Gas Activity Flat, Outlook Turns Negative

Energy sector activity was flat in the second quarter after three years of growth, according to the Federal Reserve Bank of Dallas Energy Survey.

“Results from this quarter’s survey indicate a further slowdown in the oil and gas sector, with employment and business activity essentially unchanged from last quarter,” said Michael Plante, Dallas Fed senior research economist. “Increasing pessimism and a surge of uncertainty suggest a potentially challenging near-term outlook, especially for oilfield service firms.”

U.S. Oil Output Hits New Record

U.S. crude oil production and lease condensate reached another milestone in April 2019, totaling 12.2 million barrels per day (b/d), according to EIA’s latest Petroleum Supply Monthly. April 2019 marks the first time that monthly U.S. crude oil production levels surpassed 12 million b/d, and this milestone comes less than a year after U.S. crude oil production surpassed 11 million b/d in August 2018.

Texas and the Federal Offshore Gulf of Mexico, the two largest crude oil production areas in the U.S., both reached record levels of production in April at 4.97 million b/d and 1.98 million b/d, respectively. Oklahoma also reached a record production level of 617,000 b/d.

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