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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, 10 April 20
INDIA'S BULKS SUPPLY CHAIN TAKES A HIT DURING LOCKDOWN - WOOD MACKENZIE
India is under a three-week lockdown from 25 March to contain the spread of the coronavirus outbreak. Businesses are shut, and the supply chain is ...
Thursday, 09 April 20
SUSPENSION OF WRONGFUL TRADING IN LIGHT OF COVID 19 - WF&W
KNOWLEDGE TO ELEVATE
DIRECTORS’ PERSONAL LIABILITY FOR WRONGFUL TRADING – RELIEF DURING THE CORONAVIRUS CRISIS
As the UK&rsquo ...
Wednesday, 08 April 20
LESSONS LEARNED FROM SCRUBBER INSTALLATION AND OPERATION - ABS
KNOWLEDGE TO ELEVATE
At the beginning of this year, the IMO’s global sulfur cap on marine fuels entered into force and shipowners who ch ...
Wednesday, 08 April 20
MARKET INSIGHT - INTERMODAL
With lockdown measures around the globe tightening during the last weeks of Q1, there is finally a feeling that most countries are slowly but stead ...
Tuesday, 07 April 20
SHIPPING MARKET ANALYSIS - ALLIED
With the first quarter of 2020 now firmly written in the books, it is worth examining what we have witnessed so far in the tanker market. Undoubted ...
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Showing 1021 to 1025 news of total 6871 |
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- Ind-Barath Power Infra Limited - India
- White Energy Company Limited
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Electricity Authority - India
- Gujarat Sidhee Cement - India
- GMR Energy Limited - India
- Gujarat Mineral Development Corp Ltd - India
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Simpson Spence & Young - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Ministry of Mines - Canada
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Ambuja Cements Ltd - India
- Directorate Of Revenue Intelligence - India
- Vijayanagar Sugar Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Edison Trading Spa - Italy
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Energy Development Corp, Philippines
- Aboitiz Power Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Bangladesh Power Developement Board
- Marubeni Corporation - India
- OPG Power Generation Pvt Ltd - India
- Indonesian Coal Mining Association
- Wood Mackenzie - Singapore
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Kaltim Prima Coal - Indonesia
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- New Zealand Coal & Carbon
- Bhatia International Limited - India
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Tamil Nadu electricity Board
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Eastern Energy - Thailand
- Mintek Dendrill Indonesia
- Chettinad Cement Corporation Ltd - India
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- VISA Power Limited - India
- Dalmia Cement Bharat India
- Goldman Sachs - Singapore
- Jaiprakash Power Ventures ltd
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- PTC India Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Minerals Council of Australia
- Medco Energi Mining Internasional
- TeaM Sual Corporation - Philippines
- Riau Bara Harum - Indonesia
- Uttam Galva Steels Limited - India
- CIMB Investment Bank - Malaysia
- Sree Jayajothi Cements Limited - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Siam City Cement - Thailand
- Grasim Industreis Ltd - India
- Eastern Coal Council - USA
- Iligan Light & Power Inc, Philippines
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Rashtriya Ispat Nigam Limited - India
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- Orica Australia Pty. Ltd.
- Electricity Generating Authority of Thailand
- Meenaskhi Energy Private Limited - India
- Holcim Trading Pte Ltd - Singapore
- Ministry of Finance - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Gujarat Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Billiton Holdings Pty Ltd - Australia
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Alfred C Toepfer International GmbH - Germany
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Savvy Resources Ltd - HongKong
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Energy Link Ltd, New Zealand
- Videocon Industries ltd - India
- Central Java Power - Indonesia
- Barasentosa Lestari - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Meralco Power Generation, Philippines
- MS Steel International - UAE
- London Commodity Brokers - England
- Deloitte Consulting - India
- Semirara Mining Corp, Philippines
- Sical Logistics Limited - India
- Antam Resourcindo - Indonesia
- McConnell Dowell - Australia
- PNOC Exploration Corporation - Philippines
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- Global Business Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Karaikal Port Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Bharathi Cement Corporation - India
- Globalindo Alam Lestari - Indonesia
- Kobexindo Tractors - Indoneisa
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- Australian Coal Association
- Indo Tambangraya Megah - Indonesia
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Thai Mozambique Logistica
- Bhushan Steel Limited - India
- Trasteel International SA, Italy
- Electricity Authority, New Zealand
- Kumho Petrochemical, South Korea
- Rio Tinto Coal - Australia
- ASAPP Information Group - India
- Interocean Group of Companies - India
- Standard Chartered Bank - UAE
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bukit Makmur.PT - Indonesia
- Samtan Co., Ltd - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wilmar Investment Holdings
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Salva Resources Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Miang Besar Coal Terminal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Vizag Seaport Private Limited - India
- Bayan Resources Tbk. - Indonesia
- Straits Asia Resources Limited - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Georgia Ports Authority, United States
- Global Coal Blending Company Limited - Australia
- Kohat Cement Company Ltd. - Pakistan
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Petron Corporation, Philippines
- Australian Commodity Traders Exchange
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Coastal Gujarat Power Limited - India
- SMC Global Power, Philippines
- CNBM International Corporation - China
- Formosa Plastics Group - Taiwan
- Pendopo Energi Batubara - Indonesia
- Indika Energy - Indonesia
- Indian Oil Corporation Limited
- Latin American Coal - Colombia
- Posco Energy - South Korea
- Planning Commission, India
- Leighton Contractors Pty Ltd - Australia
- The Treasury - Australian Government
- Sarangani Energy Corporation, Philippines
- Sakthi Sugars Limited - India
- Xindia Steels Limited - India
- Aditya Birla Group - India
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Orica Mining Services - Indonesia
- ICICI Bank Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Transport, Egypt
- IHS Mccloskey Coal Group - USA
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
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