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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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Monday, 17 July 23
APPROVED AMMONIA-FUELED CONTAINERSHIP - BENEFITS AND RISKS: REED SMITH
Following the news in Offshore Energy that Korea Maritime Consultants has secured approval in principle from the American Bureau of Shipping for it ...
Friday, 14 July 23
CLEAN COAL USE KEY TO DEEP CUTS IN EMISSIONS, STABLE ELECTRICITY SUPPLY - CHINA DAILY
China must push for the clean use of coal and step up integration of the dirty fuel with carbon capture, utilization and storage to achieve sustain ...
Thursday, 13 July 23
VIETNAM'S COAL EMISSIONS PRIMED FOR SURGE AFTER IMPORTS JUMP - REUTERS
Vietnam’s thermal power emissions are primed for a steep climb this summer after the country’s imports of thermal coal soared to their ...
Monday, 26 June 23
COAL PRODUCTION AND CONSUMPTION UP IN 2022 - EUROSTAT
In 2022, EU coal production and consumption continued to increase, reaching 349 million tonnes (+5% compared with the previous year) and 454 millio ...
Wednesday, 21 June 23
QATAR STRIKES SECOND BIG LNG SUPPLY DEAL WITH CHINA - REUTERS
Qatar on Tuesday secured its second large gas supply deal with a Chinese state-controlled company in less than a year, putting Asia clearly ahead i ...
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- Coastal Gujarat Power Limited - India
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- The University of Queensland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Port Waratah Coal Services - Australia
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- Chamber of Mines of South Africa
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Cement Manufacturers Association - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sinarmas Energy and Mining - Indonesia
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Xindia Steels Limited - India
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Karaikal Port Pvt Ltd - India
- Bulk Trading Sa - Switzerland
- Power Finance Corporation Ltd., India
- Siam City Cement PLC, Thailand
- Miang Besar Coal Terminal - Indonesia
- Kumho Petrochemical, South Korea
- Bharathi Cement Corporation - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Bhoruka Overseas - Indonesia
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- TeaM Sual Corporation - Philippines
- Uttam Galva Steels Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Mintek Dendrill Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Coal and Oil Company - UAE
- Maheswari Brothers Coal Limited - India
- Baramulti Group, Indonesia
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- GVK Power & Infra Limited - India
- Gujarat Sidhee Cement - India
- SN Aboitiz Power Inc, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Asmin Koalindo Tuhup - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Formosa Plastics Group - Taiwan
- Indogreen Group - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Economic Council, Georgia
- Semirara Mining Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- Banpu Public Company Limited - Thailand
- Straits Asia Resources Limited - Singapore
- Mercator Lines Limited - India
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- Intertek Mineral Services - Indonesia
- GAC Shipping (India) Pvt Ltd
- New Zealand Coal & Carbon
- Grasim Industreis Ltd - India
- Sojitz Corporation - Japan
- Toyota Tsusho Corporation, Japan
- Global Coal Blending Company Limited - Australia
- Kaltim Prima Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Marubeni Corporation - India
- Parry Sugars Refinery, India
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- PTC India Limited - India
- Carbofer General Trading SA - India
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Siam City Cement - Thailand
- Therma Luzon, Inc, Philippines
- Energy Link Ltd, New Zealand
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Larsen & Toubro Limited - India
- Romanian Commodities Exchange
- Australian Coal Association
- Krishnapatnam Port Company Ltd. - India
- Aboitiz Power Corporation - Philippines
- Agrawal Coal Company - India
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- London Commodity Brokers - England
- South Luzon Thermal Energy Corporation
- Malabar Cements Ltd - India
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Madhucon Powers Ltd - India
- SMG Consultants - Indonesia
- Petron Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- Electricity Generating Authority of Thailand
- Global Green Power PLC Corporation, Philippines
- ICICI Bank Limited - India
- Sical Logistics Limited - India
- Kepco SPC Power Corporation, Philippines
- Africa Commodities Group - South Africa
- Videocon Industries ltd - India
- Binh Thuan Hamico - Vietnam
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Medco Energi Mining Internasional
- Metalloyd Limited - United Kingdom
- MS Steel International - UAE
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- The State Trading Corporation of India Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Indonesian Coal Mining Association
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Merrill Lynch Commodities Europe
- Trasteel International SA, Italy
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- AsiaOL BioFuels Corp., Philippines
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Central Java Power - Indonesia
- Central Electricity Authority - India
- The Treasury - Australian Government
- Mercuria Energy - Indonesia
- CNBM International Corporation - China
- Bukit Asam (Persero) Tbk - Indonesia
- Vizag Seaport Private Limited - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Tata Chemicals Ltd - India
- Posco Energy - South Korea
- Planning Commission, India
- Minerals Council of Australia
- Aditya Birla Group - India
- Meralco Power Generation, Philippines
- Anglo American - United Kingdom
- Essar Steel Hazira Ltd - India
- Ambuja Cements Ltd - India
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Goldman Sachs - Singapore
- Sree Jayajothi Cements Limited - India
- Timah Investasi Mineral - Indoneisa
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Globalindo Alam Lestari - Indonesia
- Georgia Ports Authority, United States
- Kideco Jaya Agung - Indonesia
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Mjunction Services Limited - India
- Bhatia International Limited - India
- VISA Power Limited - India
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- Independent Power Producers Association of India
- SMC Global Power, Philippines
- Eastern Energy - Thailand
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Cigading International Bulk Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- Coalindo Energy - Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Latin American Coal - Colombia
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