Daily Chemical Reactions

Tops Drop – Brent Crude & Ex-US Naphtha Decline Favors Lower Global Commodity Petrochemical Values 
October 6, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
Shell, LyondellBasell, Dow, ExxonMobil, Pioneer Resources, Chevron, Stolt-Nielsen, BASF, Baystar, Trafigura, Revalyu, Bunge, Viterra, Fluor, NextEra, Mitsui OSK Lines, EDF Renewables, ADNOC, BP, Archaea Energy, Civitas, Technip Energies, Keyera, Evonik, Standard Power, NuScale, TotalEnergies, Greenland Resources, Kolibri Global Energy, Petronas, Idemitsu Kosan, Occidental, Invista, Flowserve, Rivian, Tesla, VinFast, Thyssenkrupp Nucera, Li-Cycle, ,

Daily Chemical Reaction

Tops Drop – Brent Crude & Ex-US Naphtha Decline Favors Lower Global Commodity Petrochemical Values

Key Points:

  • Global feedstock values shifted in favor of a flatter global chemical production cost curve in the first week of 4Q23, putting downward pressure on recent price and US margin increases.
  • The 3Q23 uptick in Crude oil and related chemical feedstock prices was negative for Europe and Asia, but favorable for US producers, supporting a better 2H23 than anticipated mid-year.
  • The Crude oil and Ex-US naphtha decline in the first week of 4Q will not abruptly shift late-year profit expectations, but it could stall expectations for tighter-than-expected markets in 1Q24.
  • We follow our discussion of yesterday’s ExxonMobil 3Q business update to provide views on the Shell update today, noting that the timing of realizing price and feedstock benefits vary.
  • Among other items, we also highlight weakness in the Euro and British pound relative to the US Dollar as a plus for C-MACC Co-founder Graham Copley’s upcoming business trip to Europe.

See PDF below for all charts, tables and diagrams

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