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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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Monday, 24 June 24
PHILIPPINES COAL SUPPLY ENOUGH UNTIL 2030 - PHILSTAR GLOBAL
The country’s existing coal-fired power plants are sufficient to ensure enough base load capacity in the next six years, Energy Secretary Rap ...
Friday, 14 June 24
NEXTDECADE, SAUDI ARAMCO SIGN 20-YEAR LNG SUPPLY DEAL - REUTERS
U.S. liquefied natural gas (LNG) provider NextDecade has signed a non-binding agreement with Saudi Aramco 2222.SE to supply 1.2 million tonnes per ...
Friday, 14 June 24
NEWBUILDING PRICES CLIMB 3% TO HIGHEST LEVEL IN 16 YEARS - NIELS RASMUSSEN
“Since the start of the year, newbuilding prices have risen 3% to their highest level since 2008. Compared to their most recent low in late 2 ...
Friday, 14 June 24
INDIA TARGETS HIGHER DOMESTIC COAL PRODUCTION, REDUCED IMPORTS: GOVT - REUTERS
India wants to reduce coal imports and increase domestic production, federal coal minister G. Kishan Reddy said on Thursday.
The cou ...
Thursday, 13 June 24
US LNG TO ASIA FOR POWER GENERATION EXPECTED TO CUT EMISSIONS VERSUS COAL - RYSTAD ENERGY
The value-chain emissions of liquified natural gas (LNG) are lower on average than for coal-fired power generation, even when the fuel is shipp ...
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- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- Interocean Group of Companies - India
- Chettinad Cement Corporation Ltd - India
- Salva Resources Pvt Ltd - India
- Mintek Dendrill Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Grasim Industreis Ltd - India
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- MS Steel International - UAE
- Parliament of New Zealand
- Riau Bara Harum - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- New Zealand Coal & Carbon
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Price Waterhouse Coopers - Russia
- Global Green Power PLC Corporation, Philippines
- Attock Cement Pakistan Limited
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Orica Australia Pty. Ltd.
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Minerals Council of Australia
- Simpson Spence & Young - Indonesia
- Africa Commodities Group - South Africa
- Edison Trading Spa - Italy
- Straits Asia Resources Limited - Singapore
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Indo Tambangraya Megah - Indonesia
- The University of Queensland
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Barasentosa Lestari - Indonesia
- Bulk Trading Sa - Switzerland
- GVK Power & Infra Limited - India
- OPG Power Generation Pvt Ltd - India
- Bukit Baiduri Energy - Indonesia
- Eastern Energy - Thailand
- Sakthi Sugars Limited - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Coal and Oil Company - UAE
- CNBM International Corporation - China
- Rio Tinto Coal - Australia
- Indonesian Coal Mining Association
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- IEA Clean Coal Centre - UK
- Anglo American - United Kingdom
- Madhucon Powers Ltd - India
- Sarangani Energy Corporation, Philippines
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- PowerSource Philippines DevCo
- The State Trading Corporation of India Ltd
- Trasteel International SA, Italy
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Semirara Mining and Power Corporation, Philippines
- Bhushan Steel Limited - India
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- South Luzon Thermal Energy Corporation
- AsiaOL BioFuels Corp., Philippines
- Australian Coal Association
- Agrawal Coal Company - India
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Mercator Lines Limited - India
- Tata Chemicals Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Bharathi Cement Corporation - India
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- London Commodity Brokers - England
- IHS Mccloskey Coal Group - USA
- Karbindo Abesyapradhi - Indoneisa
- Essar Steel Hazira Ltd - India
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Borneo Indobara - Indonesia
- Indika Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Business Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Metalloyd Limited - United Kingdom
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Toyota Tsusho Corporation, Japan
- Electricity Authority, New Zealand
- Lanco Infratech Ltd - India
- Electricity Generating Authority of Thailand
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Asmin Koalindo Tuhup - Indonesia
- Semirara Mining Corp, Philippines
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- ICICI Bank Limited - India
- Indogreen Group - Indonesia
- GMR Energy Limited - India
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Posco Energy - South Korea
- White Energy Company Limited
- Cement Manufacturers Association - India
- SMG Consultants - Indonesia
- Malabar Cements Ltd - India
- Central Electricity Authority - India
- Ambuja Cements Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Wood Mackenzie - Singapore
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Gujarat Sidhee Cement - India
- Cigading International Bulk Terminal - Indonesia
- Singapore Mercantile Exchange
- Kohat Cement Company Ltd. - Pakistan
- TeaM Sual Corporation - Philippines
- Bhoruka Overseas - Indonesia
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Globalindo Alam Lestari - Indonesia
- Thai Mozambique Logistica
- Dalmia Cement Bharat India
- Heidelberg Cement - Germany
- India Bulls Power Limited - India
- Formosa Plastics Group - Taiwan
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Aditya Birla Group - India
- Energy Link Ltd, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Bhatia International Limited - India
- Kepco SPC Power Corporation, Philippines
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Kumho Petrochemical, South Korea
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Timah Investasi Mineral - Indoneisa
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- Bangladesh Power Developement Board
- PNOC Exploration Corporation - Philippines
- Indian Oil Corporation Limited
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Bayan Resources Tbk. - Indonesia
- Sojitz Corporation - Japan
- Meralco Power Generation, Philippines
- Vedanta Resources Plc - India
- Siam City Cement - Thailand
- Port Waratah Coal Services - Australia
- Star Paper Mills Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Latin American Coal - Colombia
- Altura Mining Limited, Indonesia
- Directorate Of Revenue Intelligence - India
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