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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, 09 March 20
OPEC+ 'NO DEAL' A BLOW TO THE MARKET - WOOD MACKENZIE
Speaking after today’s OPEC+ meeting broke up, Ann-Louise Hittle, vice president, Macro Oils, at Wood Mackenzie, said: “Today’s o ...
Monday, 09 March 20
KOREA EAST-WEST POWER INVITED BIDS FOR 150,000 MT OF MIN 4,400 - MAX 5,499 NAR COAL
COALspot.com: KOREA EAST-WEST POWER CO. LTD. of South Korea has issued an international tender for total 150,000 MT of LCV coal for May – Jun ...
Sunday, 08 March 20
SUPRAMAX: A 55,000DWT VESSEL FIXING DELIVERY FROM EAST KALIMANTAN FOR A TRIP TO VIETNAM AT $9,100 - BALTIC BRIEFING
SUPRAMAX/ULTRAMAX - A 56,000DWT VESSEL FIXED DELIVERY SOUTH CHINA TRIP VIA INDONESIA, REDELIVERY EAST COAST INDIA, IN THE $6,000S
SUPRAMAX/U ...
Friday, 06 March 20
CHINA RESUMES 83.4 PCT COAL PRODUCTION CAPACITY AMID EPIDEMIC - XINHUA
China has resumed 83.4 percent of its coal production capacity amid the fight against the novel coronavirus outbreak, the National Energy Administr ...
Friday, 06 March 20
COLOMBIAN COAL OUTPUT FELL 2% IN 2019 - REUTERS
Coal production in Colombia, the fifth-largest coal exporter in the world, fell 2% to 82.2 million tonnes in 2019 after output at one of the princi ...
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- Australian Commodity Traders Exchange
- Sree Jayajothi Cements Limited - India
- LBH Netherlands Bv - Netherlands
- Therma Luzon, Inc, Philippines
- Grasim Industreis Ltd - India
- Parry Sugars Refinery, India
- Rio Tinto Coal - Australia
- Latin American Coal - Colombia
- Meenaskhi Energy Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Kalimantan Lumbung Energi - Indonesia
- Uttam Galva Steels Limited - India
- New Zealand Coal & Carbon
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- Indonesian Coal Mining Association
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Petrochimia International Co. Ltd.- Taiwan
- ICICI Bank Limited - India
- Agrawal Coal Company - India
- Dalmia Cement Bharat India
- Globalindo Alam Lestari - Indonesia
- Mercuria Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Sical Logistics Limited - India
- Gujarat Sidhee Cement - India
- Tata Chemicals Ltd - India
- PTC India Limited - India
- Central Java Power - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Salva Resources Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Meralco Power Generation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Indo Tambangraya Megah - Indonesia
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Kumho Petrochemical, South Korea
- TNB Fuel Sdn Bhd - Malaysia
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- OPG Power Generation Pvt Ltd - India
- VISA Power Limited - India
- Samtan Co., Ltd - South Korea
- GN Power Mariveles Coal Plant, Philippines
- Maharashtra Electricity Regulatory Commission - India
- Sarangani Energy Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Eastern Energy - Thailand
- Port Waratah Coal Services - Australia
- Asmin Koalindo Tuhup - Indonesia
- Tamil Nadu electricity Board
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- SN Aboitiz Power Inc, Philippines
- MS Steel International - UAE
- Kapuas Tunggal Persada - Indonesia
- Ministry of Transport, Egypt
- Renaissance Capital - South Africa
- Chamber of Mines of South Africa
- Indogreen Group - Indonesia
- Antam Resourcindo - Indonesia
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Timah Investasi Mineral - Indoneisa
- White Energy Company Limited
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Interocean Group of Companies - India
- Power Finance Corporation Ltd., India
- Vizag Seaport Private Limited - India
- Energy Development Corp, Philippines
- Iligan Light & Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Wilmar Investment Holdings
- Kohat Cement Company Ltd. - Pakistan
- Barasentosa Lestari - Indonesia
- McConnell Dowell - Australia
- Aditya Birla Group - India
- GVK Power & Infra Limited - India
- Electricity Authority, New Zealand
- TeaM Sual Corporation - Philippines
- Sojitz Corporation - Japan
- Economic Council, Georgia
- Bukit Makmur.PT - Indonesia
- Romanian Commodities Exchange
- Heidelberg Cement - Germany
- Indian Energy Exchange, India
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Madhucon Powers Ltd - India
- CNBM International Corporation - China
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Mintek Dendrill Indonesia
- Baramulti Group, Indonesia
- Simpson Spence & Young - Indonesia
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Straits Asia Resources Limited - Singapore
- Merrill Lynch Commodities Europe
- Bayan Resources Tbk. - Indonesia
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Riau Bara Harum - Indonesia
- Videocon Industries ltd - India
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Makarim & Taira - Indonesia
- Bhushan Steel Limited - India
- Energy Link Ltd, New Zealand
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sindya Power Generating Company Private Ltd
- GMR Energy Limited - India
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Georgia Ports Authority, United States
- Siam City Cement - Thailand
- IEA Clean Coal Centre - UK
- Billiton Holdings Pty Ltd - Australia
- Marubeni Corporation - India
- Gujarat Electricity Regulatory Commission - India
- Cigading International Bulk Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- ASAPP Information Group - India
- Chettinad Cement Corporation Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- PetroVietnam Power Coal Import and Supply Company
- Alfred C Toepfer International GmbH - Germany
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Binh Thuan Hamico - Vietnam
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Coal Council - USA
- The State Trading Corporation of India Ltd
- Price Waterhouse Coopers - Russia
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Central Electricity Authority - India
- Kepco SPC Power Corporation, Philippines
- Mjunction Services Limited - India
- Sakthi Sugars Limited - India
- Ceylon Electricity Board - Sri Lanka
- Manunggal Multi Energi - Indonesia
- Thai Mozambique Logistica
- Anglo American - United Kingdom
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Australian Coal Association
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Semirara Mining and Power Corporation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- IHS Mccloskey Coal Group - USA
- Medco Energi Mining Internasional
- Directorate General of MIneral and Coal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Karaikal Port Pvt Ltd - India
- Parliament of New Zealand
- Formosa Plastics Group - Taiwan
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Mercator Lines Limited - India
- Savvy Resources Ltd - HongKong
- European Bulk Services B.V. - Netherlands
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Deloitte Consulting - India
- Planning Commission, India
- Attock Cement Pakistan Limited
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Altura Mining Limited, Indonesia
- Coastal Gujarat Power Limited - India
- Kobexindo Tractors - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
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