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Friday, 20 March 20
VOLATILITY TO INCREASE IN TANKER MARKET FOLLOWING OIL PRICE WAR - DREWRY
Crude oil prices plunged by more than a third in the past week after OPEC+ failed to agree on production cut as demand softened in the aftermath of coronavirus (COVID-19). In its recent report, the IEA estimates global oil demand at 99.9 mbpd in 2020, which is around 90,000 bpd lower than in 2019 and a sharp downgrade from the agency’s forecast in February, which predicted global oil demand will grow 825,000 bpd in 2020.
The market expected OPEC+ to cut supply as the COVID-19 epidemic has spread from China to Europe, the Americas and Middle East. However, the negotiations failed due to strong resistance from Russia, which is of the view that the policy of capping production by OPEC+ producers to support the oil price is facilitating the development of US shale oil, with Russia losing its market share to increasing exports from the US.
After the failure of production cut talks in Vienna, Saudi Arabia started a price war by slashing the official selling prices for crude for key buyers in the international market and hinted at raising crude oil production to full capacity of 12.3 mbpd from April 2020. The ‘shock and awe’ tactics of Saudi Arabia could be a move to impose maximum pain in the quickest possible way to Russia and other producers, in an effort to renegotiate the proposed production cut and then quickly reverse the production surge and thereafter implement the production cut if a deal is reached.
However, the recent move by Saudi Arabia could lead to:
a) Renegotiation on a production cut between OPEC and Russia
b) Prolonged price war between OPEC, Russia and US producers
If there are fresh negotiations to implement a production cut by OPEC+ producers to accommodate the effect of declining oil demand, crude oil prices are expected to normalise.
But if there is a prolonged price war between Saudi Arabia, Russia and US shale oil producers, lower crude oil prices will lead to some improvement in global oil demand and refinery runs. At the same time, onshore stocking activity will also increase, especially in countries such as China as they build their Strategic Petroleum Reserve. A global supply glut is also likely to lead to an increase in floating storage especially among oil producers.
At the same time, sustained weakness in oil prices will eventually hurt US shale oil producers because of their relatively higher cost of production. In such circumstances, the market share of Middle Eastern crude will increase at the expense of US crude.
Meanwhile, tanker rates surged due to a sudden increase in VLCC chartering from Bahri, Saudi Arabia’s national shipping arm. Bahri fixed at least 18 VLCCs since the Kingdom aims to pump more crude into the market as its price war with Russia escalates. The VLCC earnings on Middle East–China (TD3C) route skyrocketed to $166,000pd on 11 March from $30,300pd on 06 March.
If Saudi Arabia manages to strike a deal with Russia to cut production in the short term, tanker rates will plummet to the pre-price war levels because of the ongoing weakness in crude oil trade on account of the spread of COVID-19 globally. On the other hand, if there is a prolonged price war, tonnage demand will rise initially with the increase in oil demand and stocking activity, which in turn will keep freight rates above pre-price war levels.
However, once sustained weakness in oil prices starts hurting US crude production, Middle Eastern crude will start displacing US crude in Asia. This in turn will squeeze tonne-mile demand for tankers as the distance between the US to Asia is almost double the distance between the Middle East to Asia. Thus we estimate that every barrel per day of annual decline in US exports to Asia at the expense of the Middle East will lead to about a 2.5% decline in overall tonne-mile demand for tankers. Freight rates in such a situation will plunge below the pre-price war levels.
Source: Drewry
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Friday, 05 January 24
BANGLADESH’S 2023 COAL-FIRED POWER OUTPUT TRIPLED, EASING SHORTAGES - REUTERS
Bangladesh nearly tripled its coal-fired power output in 2023, a Reuters analysis of government data showed, helping it tide over the worst power s ...
Tuesday, 02 January 24
COAL TRADE CONTINUES TO HEAD EAST - BALTIC EXCHANGE
The global coal trade, once concentrated in the Pacific and Atlantic basins, is undergoing a significant transformation, as highlighted in the Inte ...
Tuesday, 02 January 24
COAL CARGOES: AVOIDING EXPLOSION AND SELF-HEATING - GARD
KNOWLEDGE TO ELEVATE
Despite its contribution to greenhouse gas emissions, global coal consumption climbed to an all-time high in 2022 and is ...
Tuesday, 02 January 24
SINOPEC FORECASTS CHINA’S COAL CONSUMPTION TO PEAK AROUND 2025 - REUTERS
China Petrochemical Corp, or Sinopec, expects coal consumption to peak around 2025 at 4.37 billion metric tons, the state energy group said in an o ...
Thursday, 07 December 23
CHINA TO SET UP COAL PRODUCTION RESERVE TO STABILISE PRICES - REUTERS
China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply, the state planner said on Wednesday, even ...
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- Indian Oil Corporation Limited
- Jaiprakash Power Ventures ltd
- Timah Investasi Mineral - Indoneisa
- Jindal Steel & Power Ltd - India
- ICICI Bank Limited - India
- OPG Power Generation Pvt Ltd - India
- Georgia Ports Authority, United States
- GAC Shipping (India) Pvt Ltd
- Toyota Tsusho Corporation, Japan
- LBH Netherlands Bv - Netherlands
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- London Commodity Brokers - England
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Carbofer General Trading SA - India
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Energy Development Corp, Philippines
- White Energy Company Limited
- Interocean Group of Companies - India
- Baramulti Group, Indonesia
- Tata Chemicals Ltd - India
- Commonwealth Bank - Australia
- Eastern Energy - Thailand
- Indo Tambangraya Megah - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Wilmar Investment Holdings
- Australian Coal Association
- Deloitte Consulting - India
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- Directorate Of Revenue Intelligence - India
- The University of Queensland
- Antam Resourcindo - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Bahari Cakrawala Sebuku - Indonesia
- Edison Trading Spa - Italy
- ASAPP Information Group - India
- Price Waterhouse Coopers - Russia
- Lanco Infratech Ltd - India
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Global Green Power PLC Corporation, Philippines
- Mercator Lines Limited - India
- Heidelberg Cement - Germany
- Coalindo Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Romanian Commodities Exchange
- Thiess Contractors Indonesia
- Chettinad Cement Corporation Ltd - India
- Posco Energy - South Korea
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Indogreen Group - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Videocon Industries ltd - India
- Renaissance Capital - South Africa
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Coal and Oil Company - UAE
- PTC India Limited - India
- Riau Bara Harum - Indonesia
- Bhatia International Limited - India
- Star Paper Mills Limited - India
- Meenaskhi Energy Private Limited - India
- Indian Energy Exchange, India
- Independent Power Producers Association of India
- Orica Mining Services - Indonesia
- Salva Resources Pvt Ltd - India
- New Zealand Coal & Carbon
- Standard Chartered Bank - UAE
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Bangladesh Power Developement Board
- Mjunction Services Limited - India
- Ind-Barath Power Infra Limited - India
- Banpu Public Company Limited - Thailand
- India Bulls Power Limited - India
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- SN Aboitiz Power Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Trasteel International SA, Italy
- Malabar Cements Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Grasim Industreis Ltd - India
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- Samtan Co., Ltd - South Korea
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Global Business Power Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Generating Authority of Thailand
- Australian Commodity Traders Exchange
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Larsen & Toubro Limited - India
- TeaM Sual Corporation - Philippines
- Gujarat Sidhee Cement - India
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Vedanta Resources Plc - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- The Treasury - Australian Government
- Minerals Council of Australia
- Iligan Light & Power Inc, Philippines
- Binh Thuan Hamico - Vietnam
- Latin American Coal - Colombia
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Oldendorff Carriers - Singapore
- Bukit Baiduri Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- SMC Global Power, Philippines
- CIMB Investment Bank - Malaysia
- Anglo American - United Kingdom
- Pendopo Energi Batubara - Indonesia
- Semirara Mining Corp, Philippines
- Mercuria Energy - Indonesia
- Petron Corporation, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Miang Besar Coal Terminal - Indonesia
- MS Steel International - UAE
- Alfred C Toepfer International GmbH - Germany
- Ceylon Electricity Board - Sri Lanka
- Kapuas Tunggal Persada - Indonesia
- Sindya Power Generating Company Private Ltd
- VISA Power Limited - India
- Sarangani Energy Corporation, Philippines
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Merrill Lynch Commodities Europe
- Rio Tinto Coal - Australia
- Metalloyd Limited - United Kingdom
- Planning Commission, India
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Karaikal Port Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Simpson Spence & Young - Indonesia
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Kobexindo Tractors - Indoneisa
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Maheswari Brothers Coal Limited - India
- Global Coal Blending Company Limited - Australia
- Agrawal Coal Company - India
- Rashtriya Ispat Nigam Limited - India
- Singapore Mercantile Exchange
- Essar Steel Hazira Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Uttam Galva Steels Limited - India
- Port Waratah Coal Services - Australia
- IHS Mccloskey Coal Group - USA
- AsiaOL BioFuels Corp., Philippines
- Goldman Sachs - Singapore
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- European Bulk Services B.V. - Netherlands
- Indonesian Coal Mining Association
- Petrochimia International Co. Ltd.- Taiwan
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Borneo Indobara - Indonesia
- GMR Energy Limited - India
- McConnell Dowell - Australia
- Thai Mozambique Logistica
- Africa Commodities Group - South Africa
- Bharathi Cement Corporation - India
- Central Electricity Authority - India
- Electricity Authority, New Zealand
- Aditya Birla Group - India
- Bukit Makmur.PT - Indonesia
- Wood Mackenzie - Singapore
- Parry Sugars Refinery, India
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Savvy Resources Ltd - HongKong
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