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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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Saturday, 15 June 19
SUPRAMAX: A 58,000-TONNER, OPEN QINGDAO, WAS BOOKED TO REDELIVER IN EAST COAST INDIA AT $6,500 - BALTIC BRIEFING
Capesize
The market closed on a quiet Friday last week after a few hectic days of mid-week trading. Trade routes from Brazil to the Far East we ...
Friday, 14 June 19
PANAMAX: OUTLOOK IS MIXED - FERNLEYS
Capesize
Sentiment changed to a more nervous tone as pacific cargo volumes failed to deliver as expected, however latest activity indicates res ...
Friday, 14 June 19
ELECTRONIC (PAPERLESS) TRADING - SKULD
KNOWLEDGE TO ELEVATE
Electronic Shipping Solutions: Bolero International Ltd, E-Title Authority Pte Ltd, Global Share S.A. (edoxOnline platfor ...
Wednesday, 12 June 19
KOSPO INVITES BIDS FOR 140,000 MT OF 4,600 NCV COAL FOR SEP. 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 140,000 MT of minimum 4,600 kcal/kg NCV coal ...
Wednesday, 12 June 19
IMO 2020 - COUNTDOWN TO 1 JANUARY 2020 -HOW WILL THE CHANGES AFFECT REFINING AND SHIPPING? - WOOD MACKENZIE
We know that the IMO’s regulations represent the biggest step change the shipping industry has ever seen and the implications will be felt th ...
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- Kobexindo Tractors - Indoneisa
- European Bulk Services B.V. - Netherlands
- Medco Energi Mining Internasional
- Cement Manufacturers Association - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- IHS Mccloskey Coal Group - USA
- Alfred C Toepfer International GmbH - Germany
- Interocean Group of Companies - India
- Minerals Council of Australia
- Kaltim Prima Coal - Indonesia
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Vizag Seaport Private Limited - India
- Metalloyd Limited - United Kingdom
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Merrill Lynch Commodities Europe
- Goldman Sachs - Singapore
- Aboitiz Power Corporation - Philippines
- Rashtriya Ispat Nigam Limited - India
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Coal and Oil Company - UAE
- Heidelberg Cement - Germany
- Asmin Koalindo Tuhup - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Sarangani Energy Corporation, Philippines
- Videocon Industries ltd - India
- Romanian Commodities Exchange
- New Zealand Coal & Carbon
- Thai Mozambique Logistica
- Simpson Spence & Young - Indonesia
- Sindya Power Generating Company Private Ltd
- Planning Commission, India
- Oldendorff Carriers - Singapore
- GMR Energy Limited - India
- Madhucon Powers Ltd - India
- Power Finance Corporation Ltd., India
- Jaiprakash Power Ventures ltd
- Banpu Public Company Limited - Thailand
- London Commodity Brokers - England
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Bhushan Steel Limited - India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Indo Tambangraya Megah - Indonesia
- Standard Chartered Bank - UAE
- Mjunction Services Limited - India
- Altura Mining Limited, Indonesia
- Globalindo Alam Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Energy Development Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Larsen & Toubro Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Rio Tinto Coal - Australia
- San Jose City I Power Corp, Philippines
- Indonesian Coal Mining Association
- Vedanta Resources Plc - India
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Eastern Energy - Thailand
- Kapuas Tunggal Persada - Indonesia
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Krishnapatnam Port Company Ltd. - India
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Malabar Cements Ltd - India
- Sical Logistics Limited - India
- Orica Mining Services - Indonesia
- Chettinad Cement Corporation Ltd - India
- Deloitte Consulting - India
- Antam Resourcindo - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Attock Cement Pakistan Limited
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Riau Bara Harum - Indonesia
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Ministry of Transport, Egypt
- Lanco Infratech Ltd - India
- Dalmia Cement Bharat India
- Baramulti Group, Indonesia
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Indogreen Group - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Kartika Selabumi Mining - Indonesia
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Tata Chemicals Ltd - India
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- PTC India Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- GAC Shipping (India) Pvt Ltd
- Petrochimia International Co. Ltd.- Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Mines - Canada
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- VISA Power Limited - India
- Africa Commodities Group - South Africa
- IEA Clean Coal Centre - UK
- The Treasury - Australian Government
- Cigading International Bulk Terminal - Indonesia
- Renaissance Capital - South Africa
- Central Electricity Authority - India
- Thiess Contractors Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Ambuja Cements Ltd - India
- Tamil Nadu electricity Board
- Bayan Resources Tbk. - Indonesia
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Carbofer General Trading SA - India
- Australian Coal Association
- The University of Queensland
- Makarim & Taira - Indonesia
- Price Waterhouse Coopers - Russia
- Port Waratah Coal Services - Australia
- Bharathi Cement Corporation - India
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Pendopo Energi Batubara - Indonesia
- ASAPP Information Group - India
- White Energy Company Limited
- GVK Power & Infra Limited - India
- Mercuria Energy - Indonesia
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- Singapore Mercantile Exchange
- Wood Mackenzie - Singapore
- Savvy Resources Ltd - HongKong
- Miang Besar Coal Terminal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Sidhee Cement - India
- Bhoruka Overseas - Indonesia
- Independent Power Producers Association of India
- Samtan Co., Ltd - South Korea
- Maheswari Brothers Coal Limited - India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- International Coal Ventures Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Siam City Cement - Thailand
- Agrawal Coal Company - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- Indian Oil Corporation Limited
- Billiton Holdings Pty Ltd - Australia
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