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Friday, 17 April 20
OPEC BRACES FOR OIL MARKET'S "HISTORIC SHOCK"
 OPEC released its much anticipated April monthly report.
Crude Oil Price Movements
Crude oil prices collapsed in March 2020, recording their deepest monthly drop since the global financial crisis in 2008. The ramifications of the COVID-19 pandemic were the main driving force, resulting in unprecedented worldwide oil demand shock and massive sell-offs in the global oil markets, amid a significant crude surplus. The OPEC Reference Basket (ORB) value was down by $21.61, or 38.9%, m-o-m, to stand at $33.92/b, the lowest monthly value since September 2003. ICE Brent declined by $21.75, or 39.2%, m-o-m, to average $33.73/b, while NYMEX WTI fell $20.09, or 39.8%, to average $30.45/b. The term structure of all three crude benchmarks – ICE Brent, NYMEX WTI and DME Oman – moved to a super contango in March, and money managers cut speculative net long positions.
World Economy
The world economy is forecast to face a severe recession in 2020, declining by 1.5%, following global economic growth of 2.9% in the previous year. Following tender signs of improvement at the beginning of the year, expectations for global economic growth were quickly burdened by the strong impact of the COVID-19 pandemic. Within the OECD, the US is forecast to contract by 4.1% in 2020, following growth of 2.3% in 2019. An even larger decline is expected in the Euro-zone, where economic activity is forecast to fall by 6.0% in 2020, compared to growth of 1.2% in 2019. Japan is forecast to contract by 3.9% in 2020, comparing to growth of 0.7% in 2019. China’s 2020 GDP is forecast to grow by 1.5%, recovering from a sharp contraction in 1Q20 and following growth of 6.1% in 2019. India is forecast to grow by only 2.0%, a sharp slowdown from already weakening growth of 5.3% in 2019. Brazil’s economy is forecast to contract by 2.4% in 2020, following growth of 1.0% in 2019. Russia’s economy is forecast to contract by 0.5% in 2020, after growth of 1.4% in 2019, not only due to COVID-19, but also because of the considerable decline in oil prices. As risk remains to be skewed to the downside, further revisions may be warranted going forward.
World Oil Demand
World oil demand growth forecast for 2019 is kept unchanged at 0.83 mb/d, compared with the previous month’s assessment. For 2020, the world oil demand growth forecast is revised lower by 6.9 mb/d, to a historical drop of around 6.8 mb/d. The contraction in the 2Q of this year is expected to be around 12 mb/d, with April witnessing the worst contraction at about 20 mb/d. The impact of the COVID-19 outbreak in China in 1Q20, and its negative impact on transportation and industrial fuels in the country, has since spread globally and is now affecting oil demand growth in most other countries and regions, with an unprecedented impact on global oil demand, transportation fuels in particular. As a result, OECD oil demand is revised lower by 3.7 mb/d to decline by 4.0 mb/d, while non-OECD oil demand growth is adjusted lower by 3.2 mb/d to contract by 2.9 mb/d for the year. Considering latest developments, and the large uncertainties going forward, downward risks remain significant, suggesting possibility of further adjustments, especially in the 2Q, should new data and further developments warrant revisions.
World Oil Supply Non-OPEC oil supply growth in 2019 is revised down by 0.01 mb/d from the previous month’s assessment and is now estimated at 1.98 mb/d. For 2020, non-OPEC oil supply is forecast to decline by 1.50 mb/d, a downward revision of 3.26 mb/d from the previous projection. The impact of COVID-19, ensuing global economic recession and oil demand shock, will also lead to supply disruptions. Benchmark oil prices plunge prompted companies to respond by cutting capital expenditure to the lowest in 13 years. The 2020 oil supply growth forecast for the US was revised down by 1.05 mb/d to show a decline of 0.15 mb/d y-o-y. The supply growth for the 10 non-OPEC countries participating in the Declaration of Cooperation has also been adjusted lower. Oil supply in 2020 is now forecast to show growth only in Norway, Brazil, Guyana and Australia. OPEC NGLs production in 2019 is estimated to have grown by 0.04 mb/d to average 4.79 mb/d and for 2020 will grow by 0.04 mb/d to average 4.83 mb/d. In March, OPEC crude oil production increased by 821 tb/d m-o-m to average 28.61 mb/d, according to secondary sources.
Product Markets and Refining Operations
Global refinery margins globally showed mixed performance during March. In the US, margins weakened as strength in gasoil/diesel was offset by losses in gasoline cracks, as complex margins came close to negative territory. In Europe, product markets strengthened slightly at the middle of the barrel, supported by a fall in feedstock prices. An already relatively tight global gasoil market saw support from output cuts and continued critical industrial activities for essential services and goods amid COVID-19. However, in Asia, margins eased towards the end of the month, pressured by a weaker top of the barrel, despite healthy gasoil and fuel oil crack spreads.
Tanker Market
The tanker market has been one of few segments of the oil industry that enjoyed positive momentum in March. A sudden surge in crude exports boosted demand for VLCCs, which pulled up Suezmax rates as well. Dirty spot freight rates declined mid-month before climbing again as the market was supported by high demand for tankers as charterers rushed to place cargoes amid a collapse in demand due to the COVID-19 pandemic. Increased options for time-chartering, including for floating storage, underscored the build-up of excess supply of crude and products in the market. For the month, dirty spot rates averaged 69% higher m-o-m in March. Clean tanker spot freight rates rose 12% m-o-m, as the need to find homes for excess product supplies supported the market.
Trade
Crude and product trade flows have been notably affected by the COVID-19 pandemic and the uncertain outlook going forward, although there has been some lag in how the various regions have been affected. US crude exports had a strong start to the year, averaging 3.5 mb/d in 1Q20, a gain of 0.8 mb/d over the same quarter last year, as the US remained a net liquids exporter for the seventh-consecutive month. Meanwhile, China’s crude imports averaged 10.5 mb/d over the first two months of 2020, declining from December as disruptions caused by COVID-19 led to some imports being diverted or delayed. Product trade was also affected, with imports and exports averaging 0.3 mb/d lower in the first two months of the year compared to December. Official data showed India’s crude imports increasing slightly in February, although some estimates show a higher jump as the country took in some discounted cargoes diverted from China. India’s crude and product trade is likely to be broadly impacted in March by a government-ordered lockdown.
Stock Movements
OECD commercial oil stocks rose by 5.6 mb, m-o-m, in February to stand at 2,945 mb. This was 64.3 mb higher than the same time one year ago and 24.7 mb above the latest five-year average. Within components, crude stocks fell by 6.1 mb, while product stocks rose by 11.7 mb, m-o-m. In terms of days of forward cover, OECD commercial stocks rose by 5.0 days, m-o-m, in February to stand at 72.7 days. This was 11.5 days above the same period in 2019, and 10.3 days above the latest five-year average. Preliminary data for March showed that US total commercial oil stocks increased by 8.2 mb, m-o-m, to stand at 1,922 mb. This was 31.8 mb, or 1.7%, above the same period a year ago, and 16.2 mb, or 0.8%, lower than the latest five-year average. Within components, crude stocks rose by 25.1 mb, while product stocks fell by 16.8 mb, m-o-m.
Balance of Supply and Demand
Demand for OPEC crude in 2019 stood at 29.9 mb/d, 1.2 mb/d lower than the 2018 level. Following the recent agreement reached at the extraordinary OPEC and non-OPEC Ministerial Meetings, the demand for OPEC crude in 2020 is expected at 24.5 mb/d, around 5.4 mb/d lower than the 2019 level, though this remains heavily subject to uncertainty surrounding current market conditions.
Source: OPEC
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Friday, 06 September 24
REBOUND IN OIL DEMAND COULD LIFT MARKET IN LATTER HALF OF 2024 - BIMCO
Supply/demand
Based on a strong second half demand, the supply/balance is forecast to strengthen in 2024 but weaken slightly in 2025 as n ...
Friday, 06 September 24
GLOBAL SEABORNE LNG TRADE HAS CONTINUED TO INCREASE LAST YEAR - BANCHERO COSTA
Global seaborne LNG trade has continued to increase last year, helped also by the events in Ukraine which forced Europe to diversify away from Russ ...
Wednesday, 28 August 24
SEABORNE COAL IMPORTS INTO INDIA INCREASED BY +9.9% Y-O-Y TO 146.6 MLN T - BANCHERO COSTA
Global coal trade has really picked up pace over the past year, and is now fully back to pre-Covid levels said Banchero Costa Research in its lates ...
Tuesday, 06 August 24
EXERCISE CAUTION WITH AMMONIA SWITCH - BALTIC EXCHANGE
A new study from the Massachusetts Institute of Technology (MIT) has thrown a spanner into the plan to transition ships from diesel fuel to ammonia ...
Friday, 02 August 24
ENERGY MARKET DEVELOPMENTS: COAL AND NATURAL GAS PRICES REACH RECORD HIGHS - WORLD BANK
The recent surge in natural gas and coal prices has been so swift that the main benchmarks were roughly three times higher in 2022Q2 compared to a ...
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- Semirara Mining and Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Energy Link Ltd, New Zealand
- Mercator Lines Limited - India
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- GAC Shipping (India) Pvt Ltd
- London Commodity Brokers - England
- McConnell Dowell - Australia
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Bukit Asam (Persero) Tbk - Indonesia
- Mercuria Energy - Indonesia
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Independent Power Producers Association of India
- Tata Chemicals Ltd - India
- Wilmar Investment Holdings
- Cigading International Bulk Terminal - Indonesia
- Planning Commission, India
- Ministry of Finance - Indonesia
- Chettinad Cement Corporation Ltd - India
- Coalindo Energy - Indonesia
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement - Thailand
- Economic Council, Georgia
- Coal and Oil Company - UAE
- Global Coal Blending Company Limited - Australia
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Larsen & Toubro Limited - India
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- SN Aboitiz Power Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- New Zealand Coal & Carbon
- Australian Coal Association
- Africa Commodities Group - South Africa
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Eastern Energy - Thailand
- Dalmia Cement Bharat India
- Straits Asia Resources Limited - Singapore
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- TeaM Sual Corporation - Philippines
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Anglo American - United Kingdom
- Intertek Mineral Services - Indonesia
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Maharashtra Electricity Regulatory Commission - India
- Borneo Indobara - Indonesia
- Bhushan Steel Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Timah Investasi Mineral - Indoneisa
- Vedanta Resources Plc - India
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Thiess Contractors Indonesia
- ICICI Bank Limited - India
- Merrill Lynch Commodities Europe
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Petron Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Edison Trading Spa - Italy
- GMR Energy Limited - India
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Minerals Council of Australia
- Madhucon Powers Ltd - India
- VISA Power Limited - India
- Salva Resources Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Indo Tambangraya Megah - Indonesia
- Parliament of New Zealand
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- PTC India Limited - India
- Thai Mozambique Logistica
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Formosa Plastics Group - Taiwan
- GN Power Mariveles Coal Plant, Philippines
- The University of Queensland
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Sarangani Energy Corporation, Philippines
- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Miang Besar Coal Terminal - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Rio Tinto Coal - Australia
- Eastern Coal Council - USA
- Rashtriya Ispat Nigam Limited - India
- Sical Logistics Limited - India
- Indonesian Coal Mining Association
- Standard Chartered Bank - UAE
- Aboitiz Power Corporation - Philippines
- Australian Commodity Traders Exchange
- Deloitte Consulting - India
- Billiton Holdings Pty Ltd - Australia
- San Jose City I Power Corp, Philippines
- Electricity Authority, New Zealand
- Iligan Light & Power Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- MS Steel International - UAE
- Leighton Contractors Pty Ltd - Australia
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Bhoruka Overseas - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Kohat Cement Company Ltd. - Pakistan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Romanian Commodities Exchange
- Mintek Dendrill Indonesia
- Ministry of Transport, Egypt
- Gujarat Sidhee Cement - India
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Directorate General of MIneral and Coal - Indonesia
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Ind-Barath Power Infra Limited - India
- Asmin Koalindo Tuhup - Indonesia
- White Energy Company Limited
- Meralco Power Generation, Philippines
- Sakthi Sugars Limited - India
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Bahari Cakrawala Sebuku - Indonesia
- Jaiprakash Power Ventures ltd
- Pipit Mutiara Jaya. PT, Indonesia
- Savvy Resources Ltd - HongKong
- Orica Mining Services - Indonesia
- Antam Resourcindo - Indonesia
- India Bulls Power Limited - India
- Indika Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bulk Trading Sa - Switzerland
- Toyota Tsusho Corporation, Japan
- Sindya Power Generating Company Private Ltd
- Barasentosa Lestari - Indonesia
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- Siam City Cement PLC, Thailand
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- IEA Clean Coal Centre - UK
- Samtan Co., Ltd - South Korea
- Bangladesh Power Developement Board
- Jorong Barutama Greston.PT - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Tamil Nadu electricity Board
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Agrawal Coal Company - India
- Maheswari Brothers Coal Limited - India
- Interocean Group of Companies - India
- Lanco Infratech Ltd - India
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- The Treasury - Australian Government
- Kartika Selabumi Mining - Indonesia
- Ambuja Cements Ltd - India
- Indian Oil Corporation Limited
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- Kaltim Prima Coal - Indonesia
- Grasim Industreis Ltd - India
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- SMG Consultants - Indonesia
- Star Paper Mills Limited - India
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
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