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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, 24 April 20
COAL INDIA TO PRODUCE 710 MT COAL - MINISTER OF COAL AND MINES
Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal and company’s coal off take target will also remain at710 MT for this f ...
Friday, 24 April 20
CHINA COAL PRODUCER YANZHOU COAL POSTS 9.6 PCT RISE IN 2019 NET PROFIT - XINHUA
China’s major coal producer Yanzhou Coal Mining Co., Ltd. said Thursday that its net profit saw a 9.6 percent rise in 2019.
Th ...
Tuesday, 21 April 20
INDONESIA ACCOUNTS FOR 19% OF JAPAN'S TOTAL COAL IMPORTS - BANCHERO COSTA
Coal trade in Asia is proving remarkably resilient this year, despite the global economic impact from COVID-19.
We have seen China&r ...
Tuesday, 21 April 20
COVID-19: CHARTERPARTY MATTERS FOR SHIPOWNERS - SKULD
KNOWLEDGE TO ELEVATE
Whilst the plight of cruise ships, stranded off shore with sick passengers and crew, may be dominating media headlines, t ...
Monday, 20 April 20
SUPRAMAX: A 52,000DWT SHIP FIXING AN INDONESIA COAL RUN TO CHINA AT $4400 - BALTIC BRIEFING
Capesize
This week was the strongest period seen for the Capesize market in several months. All routes globally succumbed to improved sentiment ...
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- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Bukit Makmur.PT - Indonesia
- Aboitiz Power Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Merrill Lynch Commodities Europe
- Ambuja Cements Ltd - India
- Globalindo Alam Lestari - Indonesia
- Global Business Power Corporation, Philippines
- Metalloyd Limited - United Kingdom
- Videocon Industries ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Price Waterhouse Coopers - Russia
- Bukit Asam (Persero) Tbk - Indonesia
- CNBM International Corporation - China
- Kapuas Tunggal Persada - Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Holcim Trading Pte Ltd - Singapore
- Toyota Tsusho Corporation, Japan
- Samtan Co., Ltd - South Korea
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- India Bulls Power Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Rio Tinto Coal - Australia
- Gujarat Sidhee Cement - India
- Iligan Light & Power Inc, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Wood Mackenzie - Singapore
- Semirara Mining and Power Corporation, Philippines
- Wilmar Investment Holdings
- Planning Commission, India
- Mjunction Services Limited - India
- Banpu Public Company Limited - Thailand
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- SMG Consultants - Indonesia
- London Commodity Brokers - England
- Grasim Industreis Ltd - India
- MS Steel International - UAE
- Offshore Bulk Terminal Pte Ltd, Singapore
- Salva Resources Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Kumho Petrochemical, South Korea
- European Bulk Services B.V. - Netherlands
- Indian Energy Exchange, India
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Minerals Council of Australia
- International Coal Ventures Pvt Ltd - India
- Larsen & Toubro Limited - India
- Edison Trading Spa - Italy
- VISA Power Limited - India
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Orica Mining Services - Indonesia
- Indonesian Coal Mining Association
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sojitz Corporation - Japan
- Kohat Cement Company Ltd. - Pakistan
- Meenaskhi Energy Private Limited - India
- Ind-Barath Power Infra Limited - India
- Sakthi Sugars Limited - India
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- SN Aboitiz Power Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Deloitte Consulting - India
- San Jose City I Power Corp, Philippines
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- IEA Clean Coal Centre - UK
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Thiess Contractors Indonesia
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Energy Link Ltd, New Zealand
- Binh Thuan Hamico - Vietnam
- Bhoruka Overseas - Indonesia
- Jindal Steel & Power Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Agrawal Coal Company - India
- Interocean Group of Companies - India
- SMC Global Power, Philippines
- Coalindo Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Baramulti Group, Indonesia
- The State Trading Corporation of India Ltd
- Chettinad Cement Corporation Ltd - India
- Parry Sugars Refinery, India
- Billiton Holdings Pty Ltd - Australia
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Port Waratah Coal Services - Australia
- Power Finance Corporation Ltd., India
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- Manunggal Multi Energi - Indonesia
- Australian Coal Association
- Sical Logistics Limited - India
- Simpson Spence & Young - Indonesia
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- New Zealand Coal & Carbon
- McConnell Dowell - Australia
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- GAC Shipping (India) Pvt Ltd
- Miang Besar Coal Terminal - Indonesia
- Xindia Steels Limited - India
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Kartika Selabumi Mining - Indonesia
- Electricity Authority, New Zealand
- Therma Luzon, Inc, Philippines
- South Luzon Thermal Energy Corporation
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Pendopo Energi Batubara - Indonesia
- Essar Steel Hazira Ltd - India
- Global Green Power PLC Corporation, Philippines
- Medco Energi Mining Internasional
- Ministry of Finance - Indonesia
- Electricity Generating Authority of Thailand
- Karaikal Port Pvt Ltd - India
- Vedanta Resources Plc - India
- Maheswari Brothers Coal Limited - India
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Australian Commodity Traders Exchange
- Bayan Resources Tbk. - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Petron Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Siam City Cement PLC, Thailand
- Energy Development Corp, Philippines
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- Ministry of Transport, Egypt
- PowerSource Philippines DevCo
- Timah Investasi Mineral - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Gujarat Mineral Development Corp Ltd - India
- Tata Chemicals Ltd - India
- White Energy Company Limited
- Coal and Oil Company - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Economic Council, Georgia
- Ministry of Mines - Canada
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- Aditya Birla Group - India
- Siam City Cement - Thailand
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Bhatia International Limited - India
- PTC India Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- Independent Power Producers Association of India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Directorate Of Revenue Intelligence - India
- Makarim & Taira - Indonesia
- GVK Power & Infra Limited - India
- Mercator Lines Limited - India
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Indian Oil Corporation Limited
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- The University of Queensland
- Anglo American - United Kingdom
- Thai Mozambique Logistica
- Romanian Commodities Exchange
- Cigading International Bulk Terminal - Indonesia
- GN Power Mariveles Coal Plant, Philippines
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