Declining oil prices benefits the West

The fall in oil prices in the midst of violent clashes in Iraq, hightened tensions between the West and Russia and sanctions against Iran has brought about drastic changes.

However, the rising supplies of crude in North America and the slowing demand have led to a decline in prices, a move indicative of how the shale oil boom has benefitted Washington and its Western allies both politically and economically.

Russia and Iran are dependent on oil sales and are currently experiencing budget shortages, which has affected their position in negotiations concerning Ukrainian sovereignty or the Iranian nuclear deal.

Increasing oil production from the US and Canada have helped provide a buffer against threats of supply disruptions from Russia or the Middle East.

Russian currency has declined drastically against the dollar as its economy is restrained by sanctions from US and EU. These sanctions have forced Russia to shell more money for imports.

Oil production in the United States has increased tremendously. US continues to ban export of crude and has forced barrels from West Africa and the Middle East to look for new markets.

Lower oil prices will benefit US energy firms, while the consumers will gain from spending less the pump.

On the other hand lower oil prices will affect Iran's economy as well as its crude sales. Analysts have also stated that despite having captured oil fields in Syria and Iraq, Iran will be affected by lower oil rates as they will have to discount the black market sales that provide funds for the militant group.

As far as Saudi Arabia is concerned, lower oil prices may lead to short-term budget shortages.

Experts suggested that a price drop may not spur action from OPEC members unless crude falls below $85 per barrel.

For the time being, the surge in US oil production combined with poor demand has forced traders to store additional barrels as they wait for prices to improve.

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Major expansion of Petrochemical industry is scheduled in Qatar

Qatar which is one of the richest state per-capita in the world and as per the year 2012 the country has established nearly 15 billion barrels of oil reserves and around more than 5% of gas fields of the global resource. In terms of its petrochemicalindustry, Qatar is at second position in the midst of Gulf Co-operation Council (GCC) countries. Moreover for the country the petrochemical industry is a key source of hard earning which ranks behind the crude oil and the liquefied natural gas (LNG) sectors.

According to the industry experts, over next 5-10 years the country has a greater petrochemical expansion plans than any other country in the region and the expansion of the petrochemical industry will bring in growing revenue and produce numerous new jobs in the coming years.

According to the industry experts, in the petrochemical industries the country is taking good steps to prolong their success and with this it is taking action against the potential threats from the international souk. Moreover at the same time from low cost shale gas as a feedstock, most of the US manufacturers are gaining benefits as these will make the US the cheapest place in the world to produce petrochemicals.

In the coming years the US tactics to spend around USD 100 billion in the petrochemical facilities and it much prone to flow into the Asian market once the product starts to come on-stream by setting it in an unswerving competition with the product from the Middle East.

According to the sources, the current production of petrochemicals in the small nation state intends to boost surplus twice in order to reinforce its traction in the industry. Moreover in the Gulf region the construction of the two largest petrochemical projects is at present on track and due to the high outlay of these projects the government remains the largest shareholder in petrochemical investments.

In past few years the petrochemical industries in Qatar have seen a noteworthy rise and most of the Petchem companies based in this country have a few really big decisions in front of them as they are facing the choice of defending their markets in Asia against the low cost US product in the midst of a budding impact on price and margin.

Furthermore for the development and expansion of the chemical and the domestic petrochemical industries, the country plans to invest around USD 25 billion and in the year 2012 major petrochemical manufacturers Shell oil companies and the Qatar Petroleum had affirmed the plan to build up an olefins project in Ras Laffan Industrial City at a total outlay of USD 6.4 billion.

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Does chemical Triclosan in Colgate Total lead to cancer-cell growth?

Triclosan is said to cause cancer-cell growth and disrupted development in animals. Thus, is it safe to put chemical triclosan in soaps, toys, toothpastes etc. Let’s find out.

Consumer companies are gradually stopping the use of this harmful chemical. However, millions continue to be exposed to triclosan put in toothpastes like Colgate-Palmolive Co.’s Total. Colgate asserts that Total is safe and that the product underwent rigorous Food and Drug Administration process that led to the toothpaste’s approval in 1997 as an over-the-counter drug.

However, FDA recently published Colgate’s findings on triclosan which proved that FDA’s drug approval process is based on company-backed science to show products are safe and effective. This report made experts question the company’s research on triclosan.

The study showed fetal bone malformations in mice and rats, which was put aside as irrelevant by Colgate. However, such findings when viewed in terms of today’s science may prove that triclosan is capable of disrupting the endocrine system and affecting hormonal functioning.

Colgate continues to defend the effectiveness of its product. Colgate spokesman Thomas DiPiazza said, “In the nearly 18 years that Colgate Total has been on the market in the U.S., there has been no signal of a safety issue from adverse-event reports. Colgate also pointed to an independent 2013 review by the Cochrane Oral Health Group, a network of doctors, researchers and health advocates, which found no evidence of harmful effects associated with using Colgate Total.” The safety of this product is supported by 80 clinical studies involving 19,000 people.

The FDA is reviewing safety information available on triclosan in hand soaps and not in Colgate Total as triclosan hasn’t been proven superior to soap and water at washing hands, however its effectiveness as an ingredient in toothpastes has been made clear through its FDA approval process. FDA, however, is positive that triclosan doesn’t pose a cancer risk for humans.

Colgate stopped use of triclosan in its Softsoap liquid handsoaps and Palmolive antibacterial dish liquid in 2011. Triclosan is the most scrutinized chemical since it is now used in nearly 200 products including rugs and pet-food dispensers. Firms like Johnson & Johnson, Avon Products Inc. and Procter & Gamble Co. have decided to remove triclosan from their products.

Consumers have turned away from chemicals like Bisphenol A and phthalates and have become much more aware about toxicity ranking.

At the end of the day it is the manufacturer’s responsibility to assure that its product is safe and to provide consumers with relevant information.

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Indian agrochemical market to reach USD 7.5 billion by 2018-19

After Japan, United States and China, India is noted as the fourth largest producer of agrochemical globally and for the Indian economy it is also a significant industry. According to the researched report, in the year 2013 the domestic crop shield industry stood at USD 2.1 billion which has in turn over the five years has grown at around 8% compound annual growth rate (CAGR). In addition, the exports of Indian agrochemical have boost around 17% compound annual growth rate (CAGR) to USD 2 billion, in compare to last five years and had reported for nearly 50% of the total production.

In the fiscal year of 2013-14 the Indian agrochemical market has been estimated at USD 4.25 billion amid exports consisting 50% of the market and in order to reach USD 7.5 billion by the fiscal year 2018-19 it is projected to boost by 12-13% per annum, according to the report released by the Minister of Chemicals & Fertilizers, Ananth Kumar.

In the Indian economy the agrochemical industry plays an important role and is also noted as one of the key component of the speciality chemicals industry. Moreover in India, with the rising demand of dilapidated farmlands and food grains, have increased demands on farm yield enhancement and diminution in crop losses due to pest attacks.

According to one of the researched report by the fiscal year 2017 the crop protection market is expected to boost at around 12% per annum to reach USD 6.8 billion as in the past the crop protection market has experienced a sturdy growth and the demand of export will be largely driven as it is anticipated to grow at 15-16% per annum and at the same time as it also expected to boost its domestic demand by 8-9% per annum.

Moreover in India at present bio-pesticides is the only pesticide market with overall 4.2% and in the near future, it has been projected to reveal an annual growth rate of about 10%. According to the Chemicals & Fertilizers Minster few pesticides which has been banned in the US, could be ban in India also and by increasing the usage of bio-pesticide these have several advantages over conformist pesticides. As they are by and large intrinsically less toxic than conformist pesticide and target pest are normally affected by these chemicals, which are closely related organisms.

In terms of low awareness among farmers where approximately 25-30% of farmers are aware of agro products, Indian agrochemicals industry faces challenges in spite of strong growth drivers and for the industry players, large number of end users reach across the managing inventory, geography & distribution costs is also a challenge.

In past few years the growth in local demand have been outpaced due to exports of agrochemical from India and is now reckoned as one of the leading suppliers  of quality technical agrochemicals at attractive pricing, like Indian pharmaceuticals industry. However, few long term trends in the Indian industries will be posed by new challenged.

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Asian Petrochemical firms are switching over to LPG

Petrochemical firms based is Asian region are planning to switch to liquefied petroleum gas (LPG), by retooling plants to store and building tanks, also from the US the imported LPG is being processed. Moreover costlier naphtha as a raw material that has been traditionally used by number of Asian petrochemicals firms will be replaced by the shale gas boom.

According to the industry experts, the reason behind switching to LPG is due to raise in the supplies of the U.S. that has pushed the prices lower than those of both naphtha and LPG from their major supplier the Middle East.

Over the next one to two years few major Asian petrochemical companies such LG Chem, Samsung Total Petrochemical and Royal Vopak are expanding their import terminals or retrofitting plants s they buy more of LPG and moreover to formulate a broad range of consumer and industrial plastics gas is being used by most of the petrochemical firms. However

According to the sources, at a time whilst global trade is still recuperating from the after effects of the financial crisis, buying of LPG will somehow help the United States spruce probable surplus of the gas and also give more business to shipping industries. Since June, 2014 most of the Asian petrochemical firms based in Thailand, Japan, Taiwan and South Korea have collided up their use of LPG, as the gas has charged at least USD 50 a ton less than naphtha, as per the market players.

Moreover as per the researched report, since the month of June, 2014 the usage of LPG done by the Far East is 350,000 to 400,000 mt in compare with a large amount of 250,000 to 300,000 mt a month in the past.

Furthermore, as a part of a cost-saving feedstock as a part of Shale boom a new Chinese petrochemical plant schedules to use growing exports of U.S. liquefied petroleum gas (LPG), joining other plants on east coast of China. Additionally around USD 8 billion petrochemical complex in Huizhou city by major Chinese energy giant CNOOC Group aims to use US LPG and also South Korean based major petrochemical firms will build LPG tank, wherein nearly 40,000 tons of LPG tank will be built by Samsung Total to traverse on the shale boom.

Another major South Korean based Petrochemical producer LG Chem, after the October, 2014 scheduled maintenance turnaround at its Yeosu complex, the company will raise the LPG volume used by its crackers by half to 66,000 tonnes. Likewise, a Dutch company that stores and handles various oil and natural gas related products Royal Vopak N.V. will also build an LPG storage facility to give petrochemical manufacturers a substitute to naphtha with an initial capacity of 80,000 cubic meters, as per the researched report.

Hence as per the LPG trader, due to the amount of supplies available the prices of LPG prices should be more cutthroat against naphtha.

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World fears an oil crisis

The political tensions in oil-producing nations, especially in Iraq and Libya, have sparked fear of oil shortage. The global market is worried that oil supply from Iraq may stop at any moment, which will lead to a huge rise in oil prices. If supply from Iraq halts then oil prices will easily reach $130 per barrel.

The suspension of production will equal 3.3 million bpd of Iranian oil supplies and 1 million bpd of Libyan supplies, including weak oil exports from Syria, Egypt and Yemen. Thus, the shortage of oil hit 5.4 million bpd, equivalent to the total oil surplus capacity of the OPEC countries.

 

The demand for oil at present is at its peak, specially in Gulf oil-producing nations where consumption has reached 10 million bpd. Consumption also increased in Iraq, Egypt, Iran and Indonesia.

Majority of the oil dependent nations rely on the rise in Iraq's crude oil production to over 8 million bpd by 2018.

These facts explain the state of fear experienced by oil-producing and oil-dependent nations, especially considering the decision of international oil firms operating in Iraqi oil fields to withdraw their workers. This will lead to a delay in the rise of crude oil production and also cause a surge in oil prices.

The US shale gas revolution as well as the easing of sanctions on Iranian oil exports have prevented tremendous increase in oil prices. These two factors will continue to prevent a rise in oil prices if Iraqi exports are suspended, however the world will lose a major source of cheap energy.

Losing the largest and most important source of oil will put more pressure on oil-producing nations to maintain a steady supply of oil. However, this pressure will arise from consuming countries other than the United States, as they will continue to invest in shale as long as the price per barrel is over $90-$100.

The rise in oil prices will be inevitable if crude oil supplies from Iraq to the outside world are suspended. The need of the hour is to conduct more research and exploration of new oil field and wells

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Crude oil prices sold by ISil from the capture oilfields between Iraq and Syria

A colossal swathe of territory between Syriaand Iraq that is control by the Islamic State of Iraq and Levant (Isil) is reportedly selling crude oil from the seizure oilfields on the black market at less than half the global international prices, earning themselves over £1 million/day, according to the industry experts from the Middle East. As on 22^nd August, 2014 the existing market price for a barrel of Brent Crude that is a foremost standard price for oil that is purchased worldwide stands at approximately around USD 102/barrel and their crude oil sold by the Isis militants is between USD 25/barrel and USD 60/barrel.

Moreover, the global oil prices had lingered unpretentious in spite of the black market oil supply generated by Isis, as quantities traded in the black market are minimal. According to the industry experts, in Iraq around seven oil fields and two refineries and also in the eastern provinces of Syria around 60% of oil fields are begin allegedly controlled by the Isis militants.

Furthermore the crude which is being transported to Iran via Kurdistan, Jordan via the Anbar province, Kurdistan region of Iraq, local market of Syria and Turkey via Mosul are also begin controlled by the militants apart from controlling a number of smuggling routes. However, in comparison to 9 million barrel/day from Saudi Arabia, the ISIS militants are reportedly smuggling around 30,000 barrel/day of oil.

Despite the fact that the capacity is small, it is disquieting and noteworthy and through the sale of oil it is able to generate almost USD 2 million/day and also finance its operations. Since the territory is under ISIS control, the regions between Iraq and Syria have become apparent as the ideal black market to sell the oil.

Nevertheless, the countries such as Turkey have overlooked towards the practice and in the Southern region of Turkey, pressure from international ought to be accumulate to wrap up the black markets, however historically the Southern region of Turkey, Eastern Syria and Northern Iraq is well-known for smuggling.

According to the sources, if the ISIS can cope up to lynch on their vast other than fragile holdings, it can pull in over USD 700 million/year in the course of a amalgamation of smuggling crude oil and smaller quantities of refining itself at its refineries in Syria as projected by few experts. As per the industry experts, during winter in Eastern Europe the demand for black market oil is expected to reach your zenith and in the coming weeks Isil is prone to thrust in more oil.

As the Southern region of Iraq is its dominant producer the collision will be minimal in the short to mid-term, however oil trading by ISIS so far has remained local with buyers in Syria, Jordan, Iran and Turkey via truck owners and middlemen network.

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