| WTI Crude | $40.83/bbl | +0.7% |
| Brent Crude | $43.30/bbl | -0.5% |
| HH Nat Gas | $1.71/MMBtu | -4.5% |
| MB Propane | $0.49/gal | +2.1% |
| 3:2:1 Crack | $9.46/bbl | +1.5% |
Being the rat in the cartel has its benefits
The European Commission has fined US-based Celanese, Switzerland's Clariant, and Mexico's Orbia a total of $296 million for colluding to purchase ethylene at the lowest possible price in Europe. US-based Westlake Chemical also participated in the cartel, but they told on themselves and evaded all penalties by doing so.
What exactly did they do?
The four companies coordinated their price negotiation strategies so that ethylene sellers would agree to sell ethylene at a lower price. Ethylene is most commonly produced by steam cracking natural gas and is mostly used to produce polyethylene.
ECON 101:
This isn't the kind of collusion you're more familiar with—when sellers agree to set prices higher than they otherwise would be. Colluding to purchase ethylene at a lower price hurts ethylene sellers and increases the profits of the ethylene purchasers.
Read the press release here.
Poland wants their very own Valero
Poland's state-controlled largest refiner, PKN Orlen, is making acquisitions to become an energy giant capable of competing in international oil and gas markets.
What are those acquisitions?
PKN Orlen bought 80% of Poland's state power company, Energa, earlier this year. They purchased a smaller Polish refiner, Lotos, just last week. And now, they have signed a letter of intent to acquire Poland's natural gas company PGNiG.
Why should you care?
It's not that you'll ever work for this Polish oil & gas company, it's just important to understand how it stacks up to companies you know. In this case, once PKN Orlen completes all of these acquisitions it would be capable of generating annual earnings before interest, taxes, depreciation, and amortization (EBITDA) of $5 billion. For some perspective, Valero did $6 billion in 2019, and Phillips 66 did $4 billion.
Read more here.
Fermentation is really starting to make a comeback
Perfect Day has now raised their total investment funding to $360 million. The US-based start-up produces animal-free dairy proteins through the fermentation of cow gut bacteria. This means that the proteins produced are identical to those produced by cows, and can be used as a drop-in substitute for any product that uses cow milk.
Why you should pay attention to this:
Perfect Day isn't the only company using fermentation as a pathway to identical end products. San Diego's Genomatica has already commercialized processes to produce 1,4-Butanediol (for the plastics industry) and butylene glycol (for the cosmetics industry).
Looking into the future:
The chemicals Genomatica is producing have only been possible with oil derivatives until now. Obviously scaling fermentation bioprocesses globally is no easy feat, but it's at least something to look out for.