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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, 13 March 20
TOP 4 ACCOUNTING CONSIDERATIONS AFTER THE IMPLEMENTATION OF IMO 2020 - PWC
To install or not to install?
Following the IMO 2020 global low sulphur cap for marine fuel effective since 1 January 2020, many shi ...
Friday, 13 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 ...
Friday, 13 March 20
KOREA SOUTH-EAST POWER INVITED BIDS FOR 390,000 MT OF THERMAL COAL FOR MAY-JUNE 2020 LOADING
COALspot.com: Korea South-East Power Co., Ltd. (KOEN), has issued an international tender for total 390,000 Metric Tons of coal for May & June ...
Thursday, 12 March 20
INDIA 2019 THERMAL COAL IMPORTS RISE 12.6% TO NEARLY 200 MILLION TONNES - REUTERS
India’s thermal coal imports rose 12.6% to nearly 200 million tonnes in 2019, government data reviewed by Reuters showed, reflecting the seco ...
Wednesday, 11 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.07 PCT - XINHUA
China Taiyuan coal transaction price index stood at 133.16 points Monday, up 0.07 percent week on week.
The index, released by China ...
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- Neyveli Lignite Corporation Ltd, - India
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- White Energy Company Limited
- Indonesian Coal Mining Association
- Coastal Gujarat Power Limited - India
- Intertek Mineral Services - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Banpu Public Company Limited - Thailand
- CIMB Investment Bank - Malaysia
- MS Steel International - UAE
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- Larsen & Toubro Limited - India
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Interocean Group of Companies - India
- Singapore Mercantile Exchange
- Sojitz Corporation - Japan
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Africa Commodities Group - South Africa
- European Bulk Services B.V. - Netherlands
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Globalindo Alam Lestari - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMC Global Power, Philippines
- Therma Luzon, Inc, Philippines
- Savvy Resources Ltd - HongKong
- Kepco SPC Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Edison Trading Spa - Italy
- Energy Development Corp, Philippines
- Price Waterhouse Coopers - Russia
- Pendopo Energi Batubara - Indonesia
- Marubeni Corporation - India
- Coal and Oil Company - UAE
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Bukit Baiduri Energy - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Global Green Power PLC Corporation, Philippines
- Riau Bara Harum - Indonesia
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Indian Oil Corporation Limited
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Agrawal Coal Company - India
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Georgia Ports Authority, United States
- Chamber of Mines of South Africa
- Deloitte Consulting - India
- Mercuria Energy - Indonesia
- Mercator Lines Limited - India
- Borneo Indobara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Coal Association
- Gujarat Mineral Development Corp Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Sarangani Energy Corporation, Philippines
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Global Coal Blending Company Limited - Australia
- India Bulls Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Jorong Barutama Greston.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Goldman Sachs - Singapore
- Anglo American - United Kingdom
- Posco Energy - South Korea
- Ind-Barath Power Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- TeaM Sual Corporation - Philippines
- Ministry of Mines - Canada
- Vijayanagar Sugar Pvt Ltd - India
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Standard Chartered Bank - UAE
- Makarim & Taira - Indonesia
- Uttam Galva Steels Limited - India
- Indika Energy - Indonesia
- Tata Chemicals Ltd - India
- Semirara Mining Corp, Philippines
- Carbofer General Trading SA - India
- Central Electricity Authority - India
- Bhushan Steel Limited - India
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- CNBM International Corporation - China
- Antam Resourcindo - Indonesia
- Petron Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- Aditya Birla Group - India
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Bank of Tokyo Mitsubishi UFJ Ltd
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Commonwealth Bank - Australia
- London Commodity Brokers - England
- Latin American Coal - Colombia
- Sical Logistics Limited - India
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Economic Council, Georgia
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Binh Thuan Hamico - Vietnam
- Kartika Selabumi Mining - Indonesia
- Meralco Power Generation, Philippines
- GAC Shipping (India) Pvt Ltd
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Energy Link Ltd, New Zealand
- Kobexindo Tractors - Indoneisa
- Bharathi Cement Corporation - India
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- Ministry of Finance - Indonesia
- Kaltim Prima Coal - Indonesia
- VISA Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Rio Tinto Coal - Australia
- Maheswari Brothers Coal Limited - India
- Central Java Power - Indonesia
- Jaiprakash Power Ventures ltd
- Oldendorff Carriers - Singapore
- Vizag Seaport Private Limited - India
- Bhoruka Overseas - Indonesia
- Merrill Lynch Commodities Europe
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Mintek Dendrill Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Thiess Contractors Indonesia
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Parliament of New Zealand
- SMG Consultants - Indonesia
- Romanian Commodities Exchange
- South Luzon Thermal Energy Corporation
- Directorate General of MIneral and Coal - Indonesia
- McConnell Dowell - Australia
- PowerSource Philippines DevCo
- Planning Commission, India
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Timah Investasi Mineral - Indoneisa
- Dalmia Cement Bharat India
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- Sakthi Sugars Limited - India
- Australian Commodity Traders Exchange
- Kideco Jaya Agung - Indonesia
- Lanco Infratech Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Bulk Trading Sa - Switzerland
- Karaikal Port Pvt Ltd - India
- Bayan Resources Tbk. - Indonesia
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Cigading International Bulk Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Krishnapatnam Port Company Ltd. - India
- Simpson Spence & Young - Indonesia
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Renaissance Capital - South Africa
- IHS Mccloskey Coal Group - USA
- Holcim Trading Pte Ltd - Singapore
- Altura Mining Limited, Indonesia
- Ambuja Cements Ltd - India
- Ministry of Transport, Egypt
- Mjunction Services Limited - India
- Kapuas Tunggal Persada - Indonesia
- LBH Netherlands Bv - Netherlands
- Bukit Makmur.PT - Indonesia
- Formosa Plastics Group - Taiwan
- Cement Manufacturers Association - India
- Metalloyd Limited - United Kingdom
- Semirara Mining and Power Corporation, Philippines
- Kumho Petrochemical, South Korea
- Attock Cement Pakistan Limited
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
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