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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, 02 August 24
COAL MARKET DEVELOPMENTS: FALLING PRICES AMID RECORD-HIGH OUTPUT - WORLD BANK
Coal prices inched up in May (m/m) following an 8 percent decline in 2024Q1. The Australian and South African benchmarks have plummeted more ...
Friday, 26 July 24
FUELEU MARITME IS COMING. IS YOUR CHARTERPARTY READY? - GARD
With less than six months to implementation of FuelEU Maritime in EU and EEA trades, there has been little published advice regarding how to alloca ...
Thursday, 04 July 24
INDIA'S COAL PRODUCTION RISES 14% IN JUNE - PTI
The country’s coal production rose by 14.49% to 84.63 million tonne (MT) in June. The country’s coal output was 73.92 MT in June last f ...
Tuesday, 02 July 24
NTPC CAPTIVE COAL OUTPUT GROWS 15% IN Q1; DESPATCH RISES 17%
State-owned NTPC on Monday reported a 15 per cent year-on-year increase in the production of coal from captives mines to 9.862 metric million tonne ...
Friday, 28 June 24
KOSPO INVITED BIDS FOR 400,000 MT OF MINIMUM 4000 NCV COAL FOR FIVE YEARS
Korea Southern Power Co., Ltd. (KOSPO), is inviting bids for total 400,000 MT of Low Calorific Value Coal for 5 years starting from July 2024 until ...
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- Port Waratah Coal Services - Australia
- White Energy Company Limited
- Ministry of Mines - Canada
- South Luzon Thermal Energy Corporation
- Anglo American - United Kingdom
- Global Green Power PLC Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Kartika Selabumi Mining - Indonesia
- Semirara Mining Corp, Philippines
- Sindya Power Generating Company Private Ltd
- Posco Energy - South Korea
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Barasentosa Lestari - Indonesia
- CNBM International Corporation - China
- OPG Power Generation Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Trasteel International SA, Italy
- Karaikal Port Pvt Ltd - India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Coalindo Energy - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Lanco Infratech Ltd - India
- Planning Commission, India
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Kohat Cement Company Ltd. - Pakistan
- Thai Mozambique Logistica
- Vedanta Resources Plc - India
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- Thiess Contractors Indonesia
- Eastern Energy - Thailand
- Makarim & Taira - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- International Coal Ventures Pvt Ltd - India
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Bangladesh Power Developement Board
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Sojitz Corporation - Japan
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- McConnell Dowell - Australia
- Electricity Authority, New Zealand
- Bahari Cakrawala Sebuku - Indonesia
- The Treasury - Australian Government
- Xindia Steels Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Kepco SPC Power Corporation, Philippines
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sarangani Energy Corporation, Philippines
- Sical Logistics Limited - India
- Larsen & Toubro Limited - India
- Electricity Generating Authority of Thailand
- Central Java Power - Indonesia
- Agrawal Coal Company - India
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- PNOC Exploration Corporation - Philippines
- Neyveli Lignite Corporation Ltd, - India
- Renaissance Capital - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Meralco Power Generation, Philippines
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Vizag Seaport Private Limited - India
- Chamber of Mines of South Africa
- PowerSource Philippines DevCo
- Dalmia Cement Bharat India
- San Jose City I Power Corp, Philippines
- The University of Queensland
- Heidelberg Cement - Germany
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Star Paper Mills Limited - India
- Singapore Mercantile Exchange
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Energy Link Ltd, New Zealand
- Power Finance Corporation Ltd., India
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Bukit Baiduri Energy - Indonesia
- PTC India Limited - India
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Parry Sugars Refinery, India
- Gujarat Sidhee Cement - India
- Rashtriya Ispat Nigam Limited - India
- IEA Clean Coal Centre - UK
- Essar Steel Hazira Ltd - India
- Interocean Group of Companies - India
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Marubeni Corporation - India
- Commonwealth Bank - Australia
- SMC Global Power, Philippines
- Borneo Indobara - Indonesia
- Kaltim Prima Coal - Indonesia
- Indian Energy Exchange, India
- PetroVietnam Power Coal Import and Supply Company
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Wilmar Investment Holdings
- Grasim Industreis Ltd - India
- Wood Mackenzie - Singapore
- Kobexindo Tractors - Indoneisa
- Kalimantan Lumbung Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Madhucon Powers Ltd - India
- Ind-Barath Power Infra Limited - India
- Malabar Cements Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Ambuja Cements Ltd - India
- Antam Resourcindo - Indonesia
- Formosa Plastics Group - Taiwan
- Bukit Makmur.PT - Indonesia
- Africa Commodities Group - South Africa
- Tamil Nadu electricity Board
- Bulk Trading Sa - Switzerland
- Kumho Petrochemical, South Korea
- Bhatia International Limited - India
- Rio Tinto Coal - Australia
- Cement Manufacturers Association - India
- MS Steel International - UAE
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Bhushan Steel Limited - India
- Semirara Mining and Power Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- New Zealand Coal & Carbon
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Eastern Coal Council - USA
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Deloitte Consulting - India
- Attock Cement Pakistan Limited
- Uttam Galva Steels Limited - India
- Altura Mining Limited, Indonesia
- Georgia Ports Authority, United States
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Parliament of New Zealand
- GMR Energy Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Karbindo Abesyapradhi - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Gujarat Mineral Development Corp Ltd - India
- Mercator Lines Limited - India
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Billiton Holdings Pty Ltd - Australia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Mercuria Energy - Indonesia
- Globalindo Alam Lestari - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- TeaM Sual Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Banpu Public Company Limited - Thailand
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- Carbofer General Trading SA - India
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