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Monday, 02 December 19
OPEC PREPS FOR OIL'S 2020 BALANCING ACT - WOOD MACKENZIE
 What steps should OPEC and its non-OPEC partners take to keep the market in balance in 2020? Ahead of OPEC’s meeting in Vienna on 5 and 6 December, I turned to Ann-Louise Hittle, Vice President Macro Oils, for answers.
What does good look like for OPEC in 2020? Given the uncertainty around global supply growth, demand and geopolitics, OPEC will do well to get an outcome like 2019. Brent will average U.S.$64 per barrel in 2019, down on last year’s U.S.$71, but still the second-highest annual price since 2014. It’s a measure of OPEC’s success so far in balancing what is a fundamentally an oversupplied market.
Will demand recover in 2020? We think so. This year has disappointed because of a series of one-off factors and the slowing global economy. The 0.6 million barrels per day (b/d) outcome will be well down on the 1.1 million b/d we forecast back in January 2019.
Sanctions-related demand destruction in Venezuela and Iran, plus warm weather in Europe shouldn’t feature next year. We think annual growth will double in 2020 to 1.4 million b/d. China will be key – we expect growth there to double to 0.6 million b/d, buoyed by strong demand for marine gasoil, as bunker volumes move in response to the new low-sulphur IMO regulations on shipping fuels.
Is global supply still growing rapidly? Yes, we expect an increase of 1.8 million b/d in 2020 –assuming OPEC+ maintains its current production cuts.
What’s changing is the mix, and for the first time in years, the U.S. Lower 48 won’t dominate as much. U.S. is about half the 2020 growth, with the rest coming from other non-OPEC producers including Guyana, Brazil and Norway. The giant Norwegian field, Johan Sverdrup, on stream since October, will add 0.3 million b/d in 2020.
So, U.S. tight oil is still growing? Yes, but at a much slower rate. We expect an increase of 0.5 million b/d, well below the 2018 annual peak of 1.5 million b/d. The rig count is down by 18%, or almost 200 rigs from the November 2018 high, across all tight oil plays. Monthly production growth year-on-year peaked at 1.8 million b/d in August 2018 and could slip to just 0.4 million b/d by end 2020.
Did we anticipate that? We expected 2018 to be the peak year of U.S. tight oil growth – but not the rate of slowdown we’re seeing unfold. Investors are forcing U.S. independents, which account for 80% of tight oil production, to pare back spend on growth and generate cash flow.
What growth there is by end 2020 will come mostly from the Majors (ExxonMobil, Chevron, BP and Shell) whose plans are unaffected by capital constraints.
There’s a certain irony that the free market, through shareholder influence, is succeeding in slowing growth – to OPEC’s advantage.
Time will tell how long it lasts – we think we’ll see tight oil growth recover in 2021 though not back to peak rates.
What about OPEC production? A lot of OPEC oil is off the market – volumes are 2.5 million b/d below a year ago. Around half of that is involuntary, due to U.S. sanctions on Venezuelan and Iranian exports. The other 1.2 million b/d are deliberate cuts by OPEC+. Admirable adherence by key producers in the OPEC+ group has been instrumental in balancing the market and holding Brent above U.S.$60 this year. Without cuts, prices would be much lower.
What does OPEC need to do in December? The current agreement on cuts expires in March 2020. OPEC+ needs to rollover through to the end of 2020. But with global supply growth outpacing demand in 2020, we’ll need further cuts if demand growth disappoints again. OPEC will have to move promptly, in this case, and take out additional production if it wants to support price.
Will fundamentals or geopolitics drive the market in 2020? A bit of both. Tension in the Middle East and U.S. global influence are risks again next year. U.S. foreign policy has been emboldened by the rise of tight oil in 2019, indirectly affecting export sanctions – on Venezuela and Iran – and the attack on the giant Abqaiq facility in Saudi Arabia in September.
None of the geopolitical challenges of 2019 has gone away. But we can see signs already that the U.S. is refocusing on domestic policy in the run-up to the presidential election next November.
Source: Wood Mackenzie
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Friday, 22 November 19
UNCERTAINTY IN THERMAL COAL MARKET PERSISTED IN 3Q19 - ADARO
Uncertainty in thermal coal market persisted in 3Q19, mainly due to the actions, or inactions, of China in setting policies for global coal market. ...
Friday, 22 November 19
CIL TO DEVELOP 55 NEW COAL MINES IN NEXT 5 YEARS: COAL MINISTER
State-owned CIL will develop 55 new coal mines and expand 193 existing ones in the next five years, Parliament was informed. The company is also un ...
Thursday, 21 November 19
4TH DEEP OFFSHORE WEST AFRICA CONGRESS 2020
4th Deep Offshore West Africa Congress 2020
17 Janaury 2020
Accra, Ghana
Press Release: Following the great succ ...
Thursday, 21 November 19
INDONESIA PLANS TO KEEP $70/T COAL PRICE CAP FOR PLN, DMO - REUTERS
Indonesia’s energy minister Arifin Tasrif said his ministry plans to maintain a price cap on coal being sold to state electricity utility, PT ...
Wednesday, 20 November 19
FOREIGN DIRECT INVESTMENTS IN COMMERCIAL COAL MINING IN INDIA? - DIPESH DIPU
In August 2019, Government of India announced its approval for Foreign Direct Investment (FDI) for coal mining, processing and sale. Not that FDI i ...
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- Bahari Cakrawala Sebuku - Indonesia
- Sakthi Sugars Limited - India
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Ministry of Transport, Egypt
- The State Trading Corporation of India Ltd
- Kalimantan Lumbung Energi - Indonesia
- Formosa Plastics Group - Taiwan
- Maheswari Brothers Coal Limited - India
- Indian Energy Exchange, India
- Savvy Resources Ltd - HongKong
- Madhucon Powers Ltd - India
- Global Business Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Indika Energy - Indonesia
- Xindia Steels Limited - India
- Sree Jayajothi Cements Limited - India
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- CNBM International Corporation - China
- Siam City Cement PLC, Thailand
- Electricity Authority, New Zealand
- Krishnapatnam Port Company Ltd. - India
- GMR Energy Limited - India
- South Luzon Thermal Energy Corporation
- Neyveli Lignite Corporation Ltd, - India
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- TeaM Sual Corporation - Philippines
- Indonesian Coal Mining Association
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kaltim Prima Coal - Indonesia
- Kumho Petrochemical, South Korea
- Minerals Council of Australia
- ASAPP Information Group - India
- OPG Power Generation Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Indogreen Group - Indonesia
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Gujarat Sidhee Cement - India
- Electricity Generating Authority of Thailand
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Pendopo Energi Batubara - Indonesia
- Eastern Coal Council - USA
- Makarim & Taira - Indonesia
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Straits Asia Resources Limited - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Larsen & Toubro Limited - India
- San Jose City I Power Corp, Philippines
- Anglo American - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Energy Development Corp, Philippines
- Coalindo Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Independent Power Producers Association of India
- IEA Clean Coal Centre - UK
- Rio Tinto Coal - Australia
- Parliament of New Zealand
- Videocon Industries ltd - India
- Merrill Lynch Commodities Europe
- Gujarat Mineral Development Corp Ltd - India
- Malabar Cements Ltd - India
- Intertek Mineral Services - Indonesia
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Essar Steel Hazira Ltd - India
- Attock Cement Pakistan Limited
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Orica Mining Services - Indonesia
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Ceylon Electricity Board - Sri Lanka
- Power Finance Corporation Ltd., India
- Ambuja Cements Ltd - India
- Semirara Mining Corp, Philippines
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Altura Mining Limited, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Bukit Asam (Persero) Tbk - Indonesia
- McConnell Dowell - Australia
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Jaiprakash Power Ventures ltd
- Gujarat Electricity Regulatory Commission - India
- Bhoruka Overseas - Indonesia
- Chamber of Mines of South Africa
- SN Aboitiz Power Inc, Philippines
- Thai Mozambique Logistica
- Alfred C Toepfer International GmbH - Germany
- Orica Australia Pty. Ltd.
- Africa Commodities Group - South Africa
- Global Green Power PLC Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Coal and Oil Company - UAE
- Planning Commission, India
- White Energy Company Limited
- IHS Mccloskey Coal Group - USA
- Central Java Power - Indonesia
- Sojitz Corporation - Japan
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Thiess Contractors Indonesia
- Port Waratah Coal Services - Australia
- Mjunction Services Limited - India
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Commonwealth Bank - Australia
- Standard Chartered Bank - UAE
- Coastal Gujarat Power Limited - India
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Carbofer General Trading SA - India
- Kobexindo Tractors - Indoneisa
- Semirara Mining and Power Corporation, Philippines
- New Zealand Coal & Carbon
- Kepco SPC Power Corporation, Philippines
- Aditya Birla Group - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kartika Selabumi Mining - Indonesia
- Bulk Trading Sa - Switzerland
- Global Coal Blending Company Limited - Australia
- Mercator Lines Limited - India
- Manunggal Multi Energi - Indonesia
- Barasentosa Lestari - Indonesia
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Kapuas Tunggal Persada - Indonesia
- Lanco Infratech Ltd - India
- Chettinad Cement Corporation Ltd - India
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- GVK Power & Infra Limited - India
- Ind-Barath Power Infra Limited - India
- Oldendorff Carriers - Singapore
- Samtan Co., Ltd - South Korea
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Wilmar Investment Holdings
- Posco Energy - South Korea
- GAC Shipping (India) Pvt Ltd
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Vizag Seaport Private Limited - India
- Cigading International Bulk Terminal - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Wood Mackenzie - Singapore
- SMG Consultants - Indonesia
- Parry Sugars Refinery, India
- Sindya Power Generating Company Private Ltd
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Price Waterhouse Coopers - Russia
- Economic Council, Georgia
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Australian Coal Association
- Uttam Galva Steels Limited - India
- Romanian Commodities Exchange
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