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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, 13 February 24
WHAT IS THE OUTLOOK FOR THE NATURAL GAS SPOT PRICE IN 2024 AND 2025? EIA
We expect the U.S. benchmark Henry Hub natural gas spot price to average higher in 2024 and 2025 than in 2023, but to remain lower than $3.00 per m ...
Monday, 12 February 24
US THERMAL COAL EXPORTS HIT 5-YEAR HIGHS AND TOP $5 BLN IN 2023 - REUTERS
United States exporters of thermal coal earned more than $5 billion in 2023 as they shipped out more than 32.5 million metric tons of the high-poll ...
Tuesday, 06 February 24
NEW E-FUELS PROJECT TO MAKE INTERNATIONAL SHIPPING CLIMATE-NEUTRAL - RINA
Transport and trade on the ocean blue must be made much greener. This is the goal of the new €17 million European GAMMA project, where compani ...
Tuesday, 06 February 24
INDIA SEES ANNUAL COAL OUTPUT UP 10.9% IN 2024/25 - REUTERS
India expects domestic coal output to increase by 10.9% to 1.13 billion metric tons in the fiscal year ending March 2025, a senior government offic ...
Tuesday, 06 February 24
INDIA'S COAL PRODUCTION INCREASES BY 10.3% TO 99.73 MILLION TONNE IN JANUARY - PTI
The country’s coal output rose 10.3 per cent to 99.73 Million Tonne (MT) in January, over the same month in the previous fiscal.
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- Australian Coal Association
- The State Trading Corporation of India Ltd
- Semirara Mining and Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- White Energy Company Limited
- Indonesian Coal Mining Association
- Intertek Mineral Services - Indonesia
- Metalloyd Limited - United Kingdom
- Makarim & Taira - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- PowerSource Philippines DevCo
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- LBH Netherlands Bv - Netherlands
- SN Aboitiz Power Inc, Philippines
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Sojitz Corporation - Japan
- Salva Resources Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Attock Cement Pakistan Limited
- Interocean Group of Companies - India
- Deloitte Consulting - India
- Medco Energi Mining Internasional
- Thiess Contractors Indonesia
- Central Electricity Authority - India
- Georgia Ports Authority, United States
- Kalimantan Lumbung Energi - Indonesia
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Kideco Jaya Agung - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- SMG Consultants - Indonesia
- Essar Steel Hazira Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- Aboitiz Power Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Merrill Lynch Commodities Europe
- Larsen & Toubro Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maharashtra Electricity Regulatory Commission - India
- Meenaskhi Energy Private Limited - India
- PTC India Limited - India
- Vedanta Resources Plc - India
- Coalindo Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Wilmar Investment Holdings
- Orica Australia Pty. Ltd.
- Vijayanagar Sugar Pvt Ltd - India
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Ministry of Mines - Canada
- Bharathi Cement Corporation - India
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Directorate General of MIneral and Coal - Indonesia
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Coal and Oil Company - UAE
- Singapore Mercantile Exchange
- Trasteel International SA, Italy
- Africa Commodities Group - South Africa
- GN Power Mariveles Coal Plant, Philippines
- Aditya Birla Group - India
- CNBM International Corporation - China
- Kohat Cement Company Ltd. - Pakistan
- Malabar Cements Ltd - India
- Commonwealth Bank - Australia
- Asmin Koalindo Tuhup - Indonesia
- Wood Mackenzie - Singapore
- Borneo Indobara - Indonesia
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- Gujarat Sidhee Cement - India
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Edison Trading Spa - Italy
- Samtan Co., Ltd - South Korea
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Binh Thuan Hamico - Vietnam
- Jorong Barutama Greston.PT - Indonesia
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Iligan Light & Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- San Jose City I Power Corp, Philippines
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Energy Development Corp, Philippines
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- GAC Shipping (India) Pvt Ltd
- Indogreen Group - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Energy - Thailand
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Thai Mozambique Logistica
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Kumho Petrochemical, South Korea
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- McConnell Dowell - Australia
- MS Steel International - UAE
- South Luzon Thermal Energy Corporation
- Petrochimia International Co. Ltd.- Taiwan
- OPG Power Generation Pvt Ltd - India
- Tamil Nadu electricity Board
- Kobexindo Tractors - Indoneisa
- AsiaOL BioFuels Corp., Philippines
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Semirara Mining Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Price Waterhouse Coopers - Russia
- Sical Logistics Limited - India
- GVK Power & Infra Limited - India
- Tata Chemicals Ltd - India
- Bhoruka Overseas - Indonesia
- New Zealand Coal & Carbon
- Bulk Trading Sa - Switzerland
- Chettinad Cement Corporation Ltd - India
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Agrawal Coal Company - India
- Parry Sugars Refinery, India
- Krishnapatnam Port Company Ltd. - India
- Therma Luzon, Inc, Philippines
- Minerals Council of Australia
- Kepco SPC Power Corporation, Philippines
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Planning Commission, India
- Romanian Commodities Exchange
- Sakthi Sugars Limited - India
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- Bangladesh Power Developement Board
- Xindia Steels Limited - India
- SMC Global Power, Philippines
- Carbofer General Trading SA - India
- PetroVietnam Power Coal Import and Supply Company
- Ministry of Finance - Indonesia
- Sarangani Energy Corporation, Philippines
- Ceylon Electricity Board - Sri Lanka
- PNOC Exploration Corporation - Philippines
- Ministry of Transport, Egypt
- Savvy Resources Ltd - HongKong
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bahari Cakrawala Sebuku - Indonesia
- Posco Energy - South Korea
- Sindya Power Generating Company Private Ltd
- Toyota Tsusho Corporation, Japan
- Central Java Power - Indonesia
- VISA Power Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Standard Chartered Bank - UAE
- Holcim Trading Pte Ltd - Singapore
- Kartika Selabumi Mining - Indonesia
- The University of Queensland
- Kapuas Tunggal Persada - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- IHS Mccloskey Coal Group - USA
- Maheswari Brothers Coal Limited - India
- Rashtriya Ispat Nigam Limited - India
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Bhatia International Limited - India
- Videocon Industries ltd - India
- GMR Energy Limited - India
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Riau Bara Harum - Indonesia
- Indian Oil Corporation Limited
- CIMB Investment Bank - Malaysia
- Bukit Makmur.PT - Indonesia
- Economic Council, Georgia
- Mercator Lines Limited - India
- Chamber of Mines of South Africa
- Directorate Of Revenue Intelligence - India
- Barasentosa Lestari - Indonesia
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