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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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- Rashtriya Ispat Nigam Limited - India
- ASAPP Information Group - India
- The University of Queensland
- Aboitiz Power Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- TeaM Sual Corporation - Philippines
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Latin American Coal - Colombia
- Tata Chemicals Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Samtan Co., Ltd - South Korea
- Australian Coal Association
- Malabar Cements Ltd - India
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Baramulti Group, Indonesia
- Manunggal Multi Energi - Indonesia
- New Zealand Coal & Carbon
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Bayan Resources Tbk. - Indonesia
- Kideco Jaya Agung - Indonesia
- Economic Council, Georgia
- Meenaskhi Energy Private Limited - India
- Georgia Ports Authority, United States
- Interocean Group of Companies - India
- IEA Clean Coal Centre - UK
- Karbindo Abesyapradhi - Indoneisa
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- Mercuria Energy - Indonesia
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Coalindo Energy - Indonesia
- Wilmar Investment Holdings
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Simpson Spence & Young - Indonesia
- Indo Tambangraya Megah - Indonesia
- PTC India Limited - India
- Mercator Lines Limited - India
- San Jose City I Power Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Sojitz Corporation - Japan
- Chettinad Cement Corporation Ltd - India
- Bhushan Steel Limited - India
- PNOC Exploration Corporation - Philippines
- Timah Investasi Mineral - Indoneisa
- Cigading International Bulk Terminal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Medco Energi Mining Internasional
- Directorate Of Revenue Intelligence - India
- Asmin Koalindo Tuhup - Indonesia
- IHS Mccloskey Coal Group - USA
- Electricity Generating Authority of Thailand
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Mjunction Services Limited - India
- Rio Tinto Coal - Australia
- Ambuja Cements Ltd - India
- Power Finance Corporation Ltd., India
- SMC Global Power, Philippines
- Indian Energy Exchange, India
- Intertek Mineral Services - Indonesia
- Larsen & Toubro Limited - India
- Vizag Seaport Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Bulk Trading Sa - Switzerland
- White Energy Company Limited
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Indian Oil Corporation Limited
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- Karaikal Port Pvt Ltd - India
- Meralco Power Generation, Philippines
- CNBM International Corporation - China
- Mintek Dendrill Indonesia
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Global Coal Blending Company Limited - Australia
- ICICI Bank Limited - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Semirara Mining Corp, Philippines
- Kepco SPC Power Corporation, Philippines
- Tamil Nadu electricity Board
- Marubeni Corporation - India
- Deloitte Consulting - India
- Dalmia Cement Bharat India
- Ministry of Transport, Egypt
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- GMR Energy Limited - India
- Central Electricity Authority - India
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Petron Corporation, Philippines
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Independent Power Producers Association of India
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Ministry of Mines - Canada
- Banpu Public Company Limited - Thailand
- Barasentosa Lestari - Indonesia
- Makarim & Taira - Indonesia
- Billiton Holdings Pty Ltd - Australia
- London Commodity Brokers - England
- Jorong Barutama Greston.PT - Indonesia
- GVK Power & Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- CIMB Investment Bank - Malaysia
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Cement Manufacturers Association - India
- Sinarmas Energy and Mining - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Global Business Power Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Uttam Galva Steels Limited - India
- Planning Commission, India
- Trasteel International SA, Italy
- SN Aboitiz Power Inc, Philippines
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Australian Commodity Traders Exchange
- Jaiprakash Power Ventures ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Salva Resources Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Agrawal Coal Company - India
- Chamber of Mines of South Africa
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhoruka Overseas - Indonesia
- Africa Commodities Group - South Africa
- GAC Shipping (India) Pvt Ltd
- Price Waterhouse Coopers - Russia
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Energy Development Corp, Philippines
- Renaissance Capital - South Africa
- International Coal Ventures Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Sarangani Energy Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- MS Steel International - UAE
- OPG Power Generation Pvt Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Kaltim Prima Coal - Indonesia
- Pendopo Energi Batubara - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Directorate General of MIneral and Coal - Indonesia
- Orica Australia Pty. Ltd.
- Indonesian Coal Mining Association
- The Treasury - Australian Government
- Bank of Tokyo Mitsubishi UFJ Ltd
- Lanco Infratech Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Central Java Power - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Global Green Power PLC Corporation, Philippines
- Port Waratah Coal Services - Australia
- Edison Trading Spa - Italy
- Gujarat Sidhee Cement - India
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Goldman Sachs - Singapore
- Minerals Council of Australia
- Riau Bara Harum - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Singapore Mercantile Exchange
- McConnell Dowell - Australia
- Toyota Tsusho Corporation, Japan
- South Luzon Thermal Energy Corporation
- Kapuas Tunggal Persada - Indonesia
- Energy Link Ltd, New Zealand
- Parliament of New Zealand
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
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