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Saturday, 22 June 19
OPEC'S BATTLE FOR CONTROL OF THE OIL MARKET - WOOD MACKENZIE
 Oil supply is confounding expectations. We have just raised our forecasts for non-OPEC production, the latest in a series of incremental increases. Cumulatively, we’ve increased volumes for 2025 by an astonishing 9 million b/d compared with our forecasts in 2016, the oil price nadir. Non-OPEC supply has already bounced from the 2016 low of 54 million b/d and will touch 60 million b/d this year. Our latest Macro Oils Long Term Outlook expects a peak of 66 million b/d in 2025, 5% above our forecast last year. Oil demand too has grown more quickly than expected, up 6 million b/d on 2016 forecasts.
“Did we, like many others, underestimate the industry’s ability to adapt and innovate in the face of financial adversity – and keep on producing oil? Maybe.”
Simon Flowers
Chairman and Chief Analyst
Production keeps on growing despite structurally lower oil prices and upstream investment still 40% below peak. Did we, like many others, underestimate the industry’s ability to adapt and innovate in the face of financial adversity – and keep on producing oil? Maybe. But where on earth is it all coming from? There are four main buckets.
1. US Lower 48
tight oil and NGLs together contribute 4.3 million b/d, half of the increase versus 2016. This primarily reflects the emergence of the Permian basin as the dominant tight oil play. The delineation of sweet spots, more efficient drilling, and the present shift to industrialised exploitation have led to a significant improvement in Permian well economics. Innovation has boosted expected recovery from the more mature Bakken, Eagle Ford and Scoop-Stack plays to a lesser extent. NGLs associated with the gassier parts of the Permian and shale gas plays make up about one-third of the US L48 increase.
2. Russia
Our forecasts for 2025 are 1.4 million b/d higher than three years ago, in spite of sanctions which restrict inward investment and the transfer of the latest technological advances. Rouble weakness has buoyed upstream margins in Russia since the price fell, supporting higher investment, including an intense drilling programme in deeper, low-permeability plays in West Siberia. Sanction of some greenfield projects has been deferred by Russia’s involvement in OPEC+, effectively pushing new volumes out by a few years.
3. Guyana
Only the original Liza discovery was in our 2016 forecasts. We’ve added another 0.5 million b/d by 2025, reflecting multiple subsequent deepwater discoveries. First production is due in 2020, setting Guyana on track to enter the top 12 non-OPEC producers with over 1 million b/d by the end of the decade.
4. Mature producers
Together, these have added over 2 million b/d compared with our 2016 forecasts. Colombia, UK, Norway, US (Alaska) and Canada are among a plethora of countries which have surprised on the upside. Cost cutting, efficiencies, reduced maintenance outages, high-grading and streamlining of new projects, new discoveries tied into existing infrastructure and, in some cases, reduced tax rates have combined to slow decline rates and boost production. There are valid questions whether production from ultra-mature basins is sustainable at these rates, or volumes are merely being accelerated. As a result , some of these producers are slated to see steeper declines.
Non-OPEC supply won’t grow at this rate forever
In fact, Non-OPEC supply stops after 2025 as tight oil plateaus, with decline setting in by 2030. In the meantime, the OPEC+ strategy to boost revenues by constraining production and buoying up price has helped its competitors boost production and gain market share.
We estimate non-OPEC production will swallow up 4.3 million b/d, or 76%, of contestable demand over the next five years. OPEC’s scope to increase volumes through this period is limited to just 1.3 million b/d. The maths sits at odds with Abu Dhabi, Kuwait and Iraq which are investing heavily in new capacity. Some producers in OPEC do see flat or declining volumes in this period.
Major supply outages are helping OPEC+ to balance the market today. Disruptions are set to leap to a record 5 million b/d later this year, including 2.5 million b/d from Iran (sanctions) and Venezuela (economic meltdown and US sanctions). It may suit the rest of OPEC, as well as the US, if exports from Iran and Venezuela are kept off the market for some years – at least until non-OPEC production growth shows signs of abating.
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Thursday, 25 January 24
THE RED SEA ESCALATION IMPLICATIONS ON GLOBAL SEABORNE TRADE - MARIA BERTZELETOU
In recent days, discussions have intensified about the potential impact on the seaborne trade and ton-miles due to the evolving dynamics of market ...
Thursday, 25 January 24
RED SEA SHIPPING DISRUPTIONS KEEP GEOPOLITICAL PREMIUM FOR COMMODITIES - FITCH RATINGS
Shipping disruptions and re-routing away from the Red Sea will maintain the geopolitical premium in the main commodity markets, including for oil a ...
Friday, 19 January 24
INDONESIA TARGETS 710 MLN METRIC TONS COAL OUTPUT IN 2024 AFTER RECORD 2023 - REUTERS
Indonesia, a major thermal coal exporter, aims to produce 710 million metric tons of coal in 2024, its mining minister said on Monday, after postin ...
Friday, 19 January 24
DRUMMOND COLOMBIA COAL OUTPUT ROSE 7.1% IN 2023 - REUTERS
Coal production from miner Drummond’s Colombia operations rose 7.1% in 2023 to 29.5 million metric tons, while exports declined by 2.6% to 27 ...
Friday, 19 January 24
CHINA'S 2023 COAL OUTPUT HITS RECORD HIGH - REUTERS
China’s coal output reached a record high in 2023, data from the statistics bureau showed on Wednesday, amid an ongoing focus on energy secur ...
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- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Singapore Mercantile Exchange
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Mercuria Energy - Indonesia
- Cement Manufacturers Association - India
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Deloitte Consulting - India
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Directorate Of Revenue Intelligence - India
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Mintek Dendrill Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- ASAPP Information Group - India
- Samtan Co., Ltd - South Korea
- Borneo Indobara - Indonesia
- LBH Netherlands Bv - Netherlands
- SMG Consultants - Indonesia
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Tata Chemicals Ltd - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- International Coal Ventures Pvt Ltd - India
- Mjunction Services Limited - India
- Energy Link Ltd, New Zealand
- IEA Clean Coal Centre - UK
- Parliament of New Zealand
- Savvy Resources Ltd - HongKong
- Gujarat Mineral Development Corp Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Coalindo Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Kepco SPC Power Corporation, Philippines
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Binh Thuan Hamico - Vietnam
- Cigading International Bulk Terminal - Indonesia
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Commonwealth Bank - Australia
- PTC India Limited - India
- Indian Energy Exchange, India
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- Grasim Industreis Ltd - India
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- Global Coal Blending Company Limited - Australia
- Coastal Gujarat Power Limited - India
- Ceylon Electricity Board - Sri Lanka
- Indogreen Group - Indonesia
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement PLC, Thailand
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Bukit Makmur.PT - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Rashtriya Ispat Nigam Limited - India
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Barasentosa Lestari - Indonesia
- Sical Logistics Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Australian Commodity Traders Exchange
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Bhatia International Limited - India
- Vedanta Resources Plc - India
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Aboitiz Power Corporation - Philippines
- Standard Chartered Bank - UAE
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Bayan Resources Tbk. - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maheswari Brothers Coal Limited - India
- Sarangani Energy Corporation, Philippines
- The Treasury - Australian Government
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Antam Resourcindo - Indonesia
- Sojitz Corporation - Japan
- GVK Power & Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- TeaM Sual Corporation - Philippines
- Indian Oil Corporation Limited
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Bangladesh Power Developement Board
- Leighton Contractors Pty Ltd - Australia
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- GMR Energy Limited - India
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Metalloyd Limited - United Kingdom
- Toyota Tsusho Corporation, Japan
- ICICI Bank Limited - India
- Simpson Spence & Young - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- London Commodity Brokers - England
- Marubeni Corporation - India
- Jaiprakash Power Ventures ltd
- PetroVietnam Power Coal Import and Supply Company
- Price Waterhouse Coopers - Russia
- Edison Trading Spa - Italy
- PowerSource Philippines DevCo
- VISA Power Limited - India
- Bhushan Steel Limited - India
- New Zealand Coal & Carbon
- Petron Corporation, Philippines
- Dalmia Cement Bharat India
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- South Luzon Thermal Energy Corporation
- Meralco Power Generation, Philippines
- Oldendorff Carriers - Singapore
- India Bulls Power Limited - India
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Coal and Oil Company - UAE
- Eastern Coal Council - USA
- Ambuja Cements Ltd - India
- Kartika Selabumi Mining - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Goldman Sachs - Singapore
- Star Paper Mills Limited - India
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Electricity Authority, New Zealand
- Orica Mining Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Kobexindo Tractors - Indoneisa
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Ministry of Finance - Indonesia
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Therma Luzon, Inc, Philippines
- Kumho Petrochemical, South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kaltim Prima Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Mercator Lines Limited - India
- Latin American Coal - Colombia
- Minerals Council of Australia
- Sindya Power Generating Company Private Ltd
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Larsen & Toubro Limited - India
- Gujarat Sidhee Cement - India
- Malabar Cements Ltd - India
- Chamber of Mines of South Africa
- Billiton Holdings Pty Ltd - Australia
- Gujarat Electricity Regulatory Commission - India
- Riau Bara Harum - Indonesia
- Sakthi Sugars Limited - India
- Attock Cement Pakistan Limited
- Jorong Barutama Greston.PT - Indonesia
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