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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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Thursday, 05 March 20
INDONESIA'S BUKIT ASAM 2019 OUTPUT RISES 10.2% Y/Y - REUTERS
PT Bukit Asam, Indonesia’s state-owned coal miner, said on Wednesday its output in 2019 rose 10.2% to 29.1 million tonnes.
Coa ...
Thursday, 05 March 20
SEEING REMOTELY - IN SAFETY: BUREAU VERITAS PERFORMS FIRST SURVEY BY DRONE - BUREAU VERITAS
Bureau Veritas Marine & Offshore (BV), a world leader in testing, inspection and certification (TIC) services has completed its first survey by ...
Wednesday, 04 March 20
AN EPIDEMIC OF UNCERTAINTY - THE CORONAVIRUS AND FORCE MAJEURE - WFW
KNOWLEDGE TO ELEVATE
Do the effects of the coronavirus give rise to legitimate force majeure claims in connection with shipbuilding contracts ...
Wednesday, 04 March 20
CHINA IMPORTED 76.8 MLN TONNES OF CRUDE OIL FOR JANUARY & FEBRUARY 2020; UP 3.4% YOY - REFINITIV | BC
The COVID-19 crisis has been gripping China already for almost two months now. It’s having a huge negative impact on the economy, and this is ...
Wednesday, 04 March 20
MARKET INSIGHT - INTERMODAL
As it was expected, the whole world has been focusing on the spread of the Coronavirus, with the fast outbreak being primarily a massive humanitari ...
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- Savvy Resources Ltd - HongKong
- Simpson Spence & Young - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Rashtriya Ispat Nigam Limited - India
- CIMB Investment Bank - Malaysia
- Ministry of Transport, Egypt
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Essar Steel Hazira Ltd - India
- International Coal Ventures Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Asmin Koalindo Tuhup - Indonesia
- Altura Mining Limited, Indonesia
- Madhucon Powers Ltd - India
- Vizag Seaport Private Limited - India
- TeaM Sual Corporation - Philippines
- Semirara Mining and Power Corporation, Philippines
- Therma Luzon, Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- Makarim & Taira - Indonesia
- Ind-Barath Power Infra Limited - India
- Salva Resources Pvt Ltd - India
- Bhatia International Limited - India
- SMC Global Power, Philippines
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Kaltim Prima Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- VISA Power Limited - India
- Deloitte Consulting - India
- Ministry of Mines - Canada
- PowerSource Philippines DevCo
- ICICI Bank Limited - India
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Heidelberg Cement - Germany
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Banpu Public Company Limited - Thailand
- Port Waratah Coal Services - Australia
- Commonwealth Bank - Australia
- Petron Corporation, Philippines
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- Indian Energy Exchange, India
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Marubeni Corporation - India
- IHS Mccloskey Coal Group - USA
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- London Commodity Brokers - England
- TNB Fuel Sdn Bhd - Malaysia
- Edison Trading Spa - Italy
- The University of Queensland
- Meenaskhi Energy Private Limited - India
- Eastern Energy - Thailand
- Georgia Ports Authority, United States
- San Jose City I Power Corp, Philippines
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Carbofer General Trading SA - India
- Wood Mackenzie - Singapore
- Central Java Power - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Planning Commission, India
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- Karbindo Abesyapradhi - Indoneisa
- Indian Oil Corporation Limited
- Goldman Sachs - Singapore
- Eastern Coal Council - USA
- Agrawal Coal Company - India
- ASAPP Information Group - India
- Indika Energy - Indonesia
- Jaiprakash Power Ventures ltd
- Semirara Mining Corp, Philippines
- Electricity Authority, New Zealand
- Straits Asia Resources Limited - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dalmia Cement Bharat India
- Ceylon Electricity Board - Sri Lanka
- PTC India Limited - India
- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Barasentosa Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Merrill Lynch Commodities Europe
- AsiaOL BioFuels Corp., Philippines
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- New Zealand Coal & Carbon
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Pipit Mutiara Jaya. PT, Indonesia
- MS Steel International - UAE
- LBH Netherlands Bv - Netherlands
- Siam City Cement PLC, Thailand
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Cigading International Bulk Terminal - Indonesia
- Anglo American - United Kingdom
- Indonesian Coal Mining Association
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vijayanagar Sugar Pvt Ltd - India
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Bulk Trading Sa - Switzerland
- Grasim Industreis Ltd - India
- Bukit Makmur.PT - Indonesia
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Videocon Industries ltd - India
- Attock Cement Pakistan Limited
- Jindal Steel & Power Ltd - India
- The Treasury - Australian Government
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Ministry of Finance - Indonesia
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- PNOC Exploration Corporation - Philippines
- The State Trading Corporation of India Ltd
- Siam City Cement - Thailand
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- Aditya Birla Group - India
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- Thai Mozambique Logistica
- Tamil Nadu electricity Board
- Toyota Tsusho Corporation, Japan
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Miang Besar Coal Terminal - Indonesia
- India Bulls Power Limited - India
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Independent Power Producers Association of India
- Global Coal Blending Company Limited - Australia
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Riau Bara Harum - Indonesia
- Global Business Power Corporation, Philippines
- Central Electricity Authority - India
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Timah Investasi Mineral - Indoneisa
- Parry Sugars Refinery, India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Tata Chemicals Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Africa Commodities Group - South Africa
- Kepco SPC Power Corporation, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Uttam Galva Steels Limited - India
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Rio Tinto Coal - Australia
- Directorate General of MIneral and Coal - Indonesia
- Orica Mining Services - Indonesia
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Jorong Barutama Greston.PT - Indonesia
- Global Green Power PLC Corporation, Philippines
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