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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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Tuesday, 14 November 23
CHINA'S BELT AND ROAD INITIATIVE TURNS AWAY FROM COAL - WOOD MACKENZIE
Ambitious, contentious and big spending, China’s Belt and Road Initiative (BRI) is 10 years old. In that time, China has splashed more than U ...
Friday, 10 November 23
THE COMMODITIES FEED: OIL UNDER PRESSURE - ING
Energy – Brent plummets
The oil market came under significant pressure yesterday. ICE Brent settled 4.19% lower on the day and ...
Friday, 10 November 23
COAL USE AT U.S. POWER PLANTS CONTINUES DOWNWARD SPIRAL; FULL IMPACT ON MINES TO BE FELT IN 2024 - IEEFA
This year, the use of coal by the U.S.’s power producers has been so anemic that the fuel has not achieved a 20% market share in any month so ...
Friday, 10 November 23
INDIA: NATIONAL COAL INDEX RISES 3.83 POINTS IN SEPTEMBER AMID HIGHER DEMAND - LIVEMINT
The National Coal Index (NCI) rose 3.83 points to 143.91 in September amid growing demand for coal.
The union coal ministry on Tuesd ...
Thursday, 09 November 23
WE'RE PRODUCING TOO MUCH COAL, OIL AND GAS, REPORT SAYS - WSJ
World leaders pledged in 2015 to reduce emissions in a combined effort to limit climate change.
Now they are stepping up production ...
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- Thiess Contractors Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Standard Chartered Bank - UAE
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Economic Council, Georgia
- Mercator Lines Limited - India
- Edison Trading Spa - Italy
- Tata Chemicals Ltd - India
- SN Aboitiz Power Inc, Philippines
- Kobexindo Tractors - Indoneisa
- Bukit Asam (Persero) Tbk - Indonesia
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
- Ambuja Cements Ltd - India
- Essar Steel Hazira Ltd - India
- Uttam Galva Steels Limited - India
- The State Trading Corporation of India Ltd
- PetroVietnam Power Coal Import and Supply Company
- Holcim Trading Pte Ltd - Singapore
- Directorate Of Revenue Intelligence - India
- SMC Global Power, Philippines
- Siam City Cement PLC, Thailand
- Globalindo Alam Lestari - Indonesia
- Sindya Power Generating Company Private Ltd
- Indo Tambangraya Megah - Indonesia
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Bukit Makmur.PT - Indonesia
- GVK Power & Infra Limited - India
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- Indogreen Group - Indonesia
- Altura Mining Limited, Indonesia
- Sakthi Sugars Limited - India
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Marubeni Corporation - India
- Ministry of Mines - Canada
- Makarim & Taira - Indonesia
- Bukit Baiduri Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Australian Coal Association
- GN Power Mariveles Coal Plant, Philippines
- Karaikal Port Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- Cement Manufacturers Association - India
- Vizag Seaport Private Limited - India
- Coastal Gujarat Power Limited - India
- Indonesian Coal Mining Association
- Bangladesh Power Developement Board
- Wilmar Investment Holdings
- PNOC Exploration Corporation - Philippines
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- International Coal Ventures Pvt Ltd - India
- Simpson Spence & Young - Indonesia
- Power Finance Corporation Ltd., India
- OPG Power Generation Pvt Ltd - India
- PowerSource Philippines DevCo
- Asmin Koalindo Tuhup - Indonesia
- Larsen & Toubro Limited - India
- IEA Clean Coal Centre - UK
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Baramulti Group, Indonesia
- VISA Power Limited - India
- Heidelberg Cement - Germany
- Bayan Resources Tbk. - Indonesia
- Anglo American - United Kingdom
- Oldendorff Carriers - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- GAC Shipping (India) Pvt Ltd
- Gujarat Mineral Development Corp Ltd - India
- Georgia Ports Authority, United States
- Madhucon Powers Ltd - India
- Kaltim Prima Coal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bharathi Cement Corporation - India
- Indika Energy - Indonesia
- Central Java Power - Indonesia
- Deloitte Consulting - India
- Planning Commission, India
- Mintek Dendrill Indonesia
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- CNBM International Corporation - China
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Savvy Resources Ltd - HongKong
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- SMG Consultants - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- White Energy Company Limited
- Jaiprakash Power Ventures ltd
- Toyota Tsusho Corporation, Japan
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Gujarat Sidhee Cement - India
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Meenaskhi Energy Private Limited - India
- Kartika Selabumi Mining - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Tamil Nadu electricity Board
- Straits Asia Resources Limited - Singapore
- Ministry of Transport, Egypt
- McConnell Dowell - Australia
- Dalmia Cement Bharat India
- Coal and Oil Company - UAE
- Riau Bara Harum - Indonesia
- Latin American Coal - Colombia
- Parliament of New Zealand
- Samtan Co., Ltd - South Korea
- Orica Mining Services - Indonesia
- India Bulls Power Limited - India
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- CIMB Investment Bank - Malaysia
- Australian Commodity Traders Exchange
- Maharashtra Electricity Regulatory Commission - India
- Rashtriya Ispat Nigam Limited - India
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Indian Oil Corporation Limited
- New Zealand Coal & Carbon
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Parry Sugars Refinery, India
- PTC India Limited - India
- Semirara Mining and Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Goldman Sachs - Singapore
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- GMR Energy Limited - India
- Jorong Barutama Greston.PT - Indonesia
- The Treasury - Australian Government
- Singapore Mercantile Exchange
- Energy Link Ltd, New Zealand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Posco Energy - South Korea
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Ceylon Electricity Board - Sri Lanka
- Port Waratah Coal Services - Australia
- Jindal Steel & Power Ltd - India
- Global Coal Blending Company Limited - Australia
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- MS Steel International - UAE
- Pipit Mutiara Jaya. PT, Indonesia
- The University of Queensland
- Bulk Trading Sa - Switzerland
- Manunggal Multi Energi - Indonesia
- Meralco Power Generation, Philippines
- South Luzon Thermal Energy Corporation
- Salva Resources Pvt Ltd - India
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Petron Corporation, Philippines
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- ASAPP Information Group - India
- Billiton Holdings Pty Ltd - Australia
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Sarangani Energy Corporation, Philippines
- Independent Power Producers Association of India
- AsiaOL BioFuels Corp., Philippines
- Ministry of Finance - Indonesia
- Lanco Infratech Ltd - India
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Attock Cement Pakistan Limited
- Alfred C Toepfer International GmbH - Germany
- Neyveli Lignite Corporation Ltd, - India
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Maheswari Brothers Coal Limited - India
- LBH Netherlands Bv - Netherlands
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Romanian Commodities Exchange
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