03 July 2013 05:34 [Source: ICIS news]
By Nurluqman Suratman
SINGAPORE (ICIS)--Crude futures surged early on Wednesday, with US crude jumping by more than $2/tonne, as escalating political tensions in Egypt are unsettling investors.
Players in the petrochemical markets, on the other hand, are on a wait-and-see mode, wary that the crisis in the north African country could affect trades in the neighbouring Middle East markets.
At 10:58 hours Singapore time (02:58 GMT), August NYMEX crude was trading at $101.82/bbl, off the $102.18/bbl high in the morning session that represented a $2.58/bbl increase on Tuesday’s close.
August Brent crude on ICE Futures, on the other hand, hit a session high of $105.61/bbl on Wednesday morning, up by $1.61/bbl from the previous settlement at $104.00/bbl.
Thousands have taken to the streets of Egypt since Sunday, calling on president Mohammed Morsi to step down, according to media reports.
In a TV address late on Tuesday, Morsi vowed not to resign, saying he remained the country’s legitimate president.
Egypt’s army has threatened to intervene if Morsi’s government failed to resolve the crisis by 16:30 local time (14:30 GMT) on Wednesday, according to media reports.
Morsi became Egypt's president on 30 June 2012 following the 2011 revolution that toppled the government of his predecessor Hosni Mubarak.
Meanwhile, the uncertainty in Egypt’s political situation has affected sentiment in petrochemical trades, but so far, market reaction has been muted.
Political developments in Egypt are being monitored closely, but there is still no reason to be overly concerned as yet, said a source at a Saudi polypropylene (PP) producer, which does not count the north African country as a major market.
“Political [unrest] there [in Egypt] is now more common. If the unrest spills over to other [neighbouring] markets, then we will be worried,” the source said.
An Egyptian linear alkylbenzene producer (LAB) said the domestic political unrest is not yet affecting the market.
“Local demand continues to be good for LAB. Our shipments of LAB from Alexandria port have also not been affected, and we are continuing to export large volumes,” a source at the producer said.
Egypt’s total LAB capacity is 155,000 tonnes/year, with domestic demand estimated at 75,000 tonnes/year.
The country’s LAB shipments to Turkey were slightly delayed but are continuing, said a Turkish trader.
“There has been a slight delay in shipments arriving from Egypt, but nothing major,” he said.
Egypt is a leading supplier of LAB into Turkey, with a 45% share of Turkey’s imports of the material. In 2012, Egypt exported 22,600 tonnes of LAB to Turkey.
With additional reporting by Prema Viswanathan and Muhamad Fadhil
($1 = €0.77)
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