Crude, Asia petrochemical shares fall as coronavirus cases spike

Author: Pearl Bantillo


SINGAPORE (ICIS)--Crude prices fell on Friday, along with shares of major petrochemical firms in Asia, on demand concerns following continued spikes in coronavirus cases in the US and Europe.

At 08:36 GMT, Brent crude futures stood at $43.09/bbl, while US WTI was at $40.68/bbl - both down 1% from the previous day.

Global crude demand this year is expected to contract by 8.8m bb/day, deeper than the earlier forecast of an 8.4m bbl/day decline following renewed lockdowns in parts of the world, according to the International Energy Agency (IEA).

In the equities market, shares of Chinese petrochemical giants Sinopec and PetroChina were down by more than 2% on Friday afternoon.

Company/Stock Exchange (at 08:15 GMT) % Change
Nikkei 225 (Japan) -0.53%
ENEOS -1.96%
Mitsubishi Chemical Holdings Corporation -1.50%
Mitsui Chemicals, Inc. -0.96%
Hang Seng Index (Hong Kong) -0.12%
Sinopec Shanghai Petrochemical Company Limited -2.22%
PetroChina -2.82%
KOSPI Composite Index (South Korea) 0.74%
OCI Company -1.65%
SK Innovation -1.58%
LG Chem 1.88%
Lotte Chemical Corp -4.31%
Hanwha Corporation 1.91%
TSEC weighted index (Taiwan) 0.39%
Formosa Petrochemical Corp -1.14
Nan Ya Plastics Corp 0.31%
Formosa Chemicals & Fibre Corp 0.00%
STI Index (Singapore) -0.09%
Wilmar International Limited 0.71%
FTSE Bursa Malaysia KLCI (Malaysia) -0.50%
SSE Composite Index (Shanghai, China) -0.86%
Jakarta Islamic Index (Indonesia) 0.04%
PSE Index (Philippines) -0.77%
SET index (Thailand) 1.05%
PTT Global Chemical 0.99%
Siam Cement 1.40%

Positive sentiment spurred by upbeat trial results on a vaccine being developed by Pfizer and BioNTech fizzled out as the US posted another record daily increase in infections at more than 144,000.

Total US cases stood at above 10.5m, about a fifth of the total global infections of 52.8m, according to latest data from US-based Johns Hopkins University.

The coronavirus pandemic has plunged the world economy into its deepest recession since The Great Depression of the 1930s.

To emerge from the recession, a “determined collective action” is required, International Monetary Fund (IMF) managing director Kristalina Georgieva said in her remarks at the Caixin Summit on Friday.

“We must be determined to underpin the road to recovery with continuous strong policy actions… do not withdraw fiscal policy support and monetary policy support prematurely,” she said.

Economies across the world will have to be underpinned by sustained government spending and accommodative monetary policies.

“Because of the decisive action of governments and central banks, we managed to put a floor under the world economy. And we are seeing the green shoots of recovery,” Georgieva said.

Among major economies, only China will post growth in 2020, having emerged much earlier than other countries from economy-paralyzing lockdown. The IMF forecasts a 1.9% growth for the world’s second-biggest economy.

India, which is an emerging market economy, recently announced stimulus programs worth a combined rupee (Rs) 2.65tr ($36bn), equivalent to 15% of its GDP.

Focus article by Pearl Bantillo

($1 = Rs74.6)

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