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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, 27 March 20
CHINA'S BULKS: THE SENTIMENT GAP BETWEEN STEEL AND COAL WIDENS - WOOD MACKENZIE
China seems to be containing its local coronavirus situation, with imported cases now posing the greater threat. While quarantine measures remain t ...
Friday, 27 March 20
S.KOREA Q1 THERMAL COAL IMPORTS SET FOR 10-YR LOW ON ANTI-POLLUTION MEASURES - REUTERS
South Korea’s first-quarter thermal coal imports are set to fall to a decade-low due to stricter air pollution measures, while the coronaviru ...
Friday, 27 March 20
PORT OF NEWCASTLE OPERATIONS CONTINUE WITH COVID-19 RESPONSE MEASURES IN PLACE
Port of Newcastle, like many organisations, is taking a precautionary approach to help manage COVID-19 risks in the community. Our focus is on ensu ...
Thursday, 26 March 20
CHINA'S BENCHMARK POWER COAL PRICE DROPS SLIGHTLY - XINHUA
China’s benchmark power coal price dropped slightly during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge ...
Wednesday, 25 March 20
CORONAVIRUS CRISIS IS CRUSHING GLOBAL GDP GROWTH - FITCH RATINGS
The coronavirus crisis is crushing global GDP growth according to Fitch Ratings in its latest quarterly “Global Economic Outlook” (GEO) ...
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- Deloitte Consulting - India
- Pendopo Energi Batubara - Indonesia
- PowerSource Philippines DevCo
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Altura Mining Limited, Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Sakthi Sugars Limited - India
- Anglo American - United Kingdom
- Lanco Infratech Ltd - India
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- GVK Power & Infra Limited - India
- Merrill Lynch Commodities Europe
- Savvy Resources Ltd - HongKong
- Coal and Oil Company - UAE
- Vizag Seaport Private Limited - India
- Star Paper Mills Limited - India
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Manunggal Multi Energi - Indonesia
- Price Waterhouse Coopers - Russia
- Marubeni Corporation - India
- San Jose City I Power Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Africa Commodities Group - South Africa
- Jaiprakash Power Ventures ltd
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Wilmar Investment Holdings
- Agrawal Coal Company - India
- Energy Link Ltd, New Zealand
- Posco Energy - South Korea
- Ministry of Transport, Egypt
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- Directorate Of Revenue Intelligence - India
- Petron Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- Thiess Contractors Indonesia
- Sinarmas Energy and Mining - Indonesia
- Mjunction Services Limited - India
- Global Coal Blending Company Limited - Australia
- Siam City Cement PLC, Thailand
- Mercuria Energy - Indonesia
- Samtan Co., Ltd - South Korea
- Leighton Contractors Pty Ltd - Australia
- Heidelberg Cement - Germany
- Ministry of Finance - Indonesia
- Grasim Industreis Ltd - India
- Chamber of Mines of South Africa
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Maheswari Brothers Coal Limited - India
- Makarim & Taira - Indonesia
- Kepco SPC Power Corporation, Philippines
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Semirara Mining and Power Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- Formosa Plastics Group - Taiwan
- PTC India Limited - India
- Minerals Council of Australia
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Jindal Steel & Power Ltd - India
- Binh Thuan Hamico - Vietnam
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Trasteel International SA, Italy
- Chettinad Cement Corporation Ltd - India
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Videocon Industries ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Timah Investasi Mineral - Indoneisa
- Semirara Mining Corp, Philippines
- Coalindo Energy - Indonesia
- Dalmia Cement Bharat India
- GN Power Mariveles Coal Plant, Philippines
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- India Bulls Power Limited - India
- Electricity Authority, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Orica Australia Pty. Ltd.
- Banpu Public Company Limited - Thailand
- Rio Tinto Coal - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Standard Chartered Bank - UAE
- ASAPP Information Group - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Simpson Spence & Young - Indonesia
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Riau Bara Harum - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Madhucon Powers Ltd - India
- SMC Global Power, Philippines
- Energy Development Corp, Philippines
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Salva Resources Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Romanian Commodities Exchange
- IHS Mccloskey Coal Group - USA
- Power Finance Corporation Ltd., India
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Australian Coal Association
- Aboitiz Power Corporation - Philippines
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Ceylon Electricity Board - Sri Lanka
- Globalindo Alam Lestari - Indonesia
- Bukit Makmur.PT - Indonesia
- Krishnapatnam Port Company Ltd. - India
- ICICI Bank Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bayan Resources Tbk. - Indonesia
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Neyveli Lignite Corporation Ltd, - India
- LBH Netherlands Bv - Netherlands
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Vedanta Resources Plc - India
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- McConnell Dowell - Australia
- SN Aboitiz Power Inc, Philippines
- Billiton Holdings Pty Ltd - Australia
- SMG Consultants - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Uttam Galva Steels Limited - India
- Kapuas Tunggal Persada - Indonesia
- Bangladesh Power Developement Board
- Bhushan Steel Limited - India
- Gujarat Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Siam City Cement - Thailand
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Iligan Light & Power Inc, Philippines
- CIMB Investment Bank - Malaysia
- TeaM Sual Corporation - Philippines
- New Zealand Coal & Carbon
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Energy - Thailand
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
- Goldman Sachs - Singapore
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- VISA Power Limited - India
- The Treasury - Australian Government
- The University of Queensland
- AsiaOL BioFuels Corp., Philippines
- Meralco Power Generation, Philippines
- Sree Jayajothi Cements Limited - India
- PNOC Exploration Corporation - Philippines
- CNBM International Corporation - China
- South Luzon Thermal Energy Corporation
- Planning Commission, India
- Indian Energy Exchange, India
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Georgia Ports Authority, United States
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Cement Manufacturers Association - India
- The State Trading Corporation of India Ltd
- Holcim Trading Pte Ltd - Singapore
- Economic Council, Georgia
- Karaikal Port Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Parliament of New Zealand
- Kaltim Prima Coal - Indonesia
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Straits Asia Resources Limited - Singapore
- Sical Logistics Limited - India
- Central Java Power - Indonesia
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