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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, 23 February 24
STRONG OUTLOOK FOR THE TANKER MARKET IN 2024 AND BEYOND - DNV
Several factors have aligned over the past two years to create a robust and profitable market for tanker owners, which is expected to drive newbuil ...
Friday, 23 February 24
AUSTRALIAN COAL FLOWS TO ASIA HOVER ABOVE LAST YEAR’S VOLUME TONNES - SIGNAL GROUP
In the final days of February, the dry bulk freight market appeared to maintain a relatively stable momentum, particularly evident in the large ves ...
Friday, 23 February 24
RUSSIAN COAL SHIPMENTS FALL 14% AS SANCTIONS BITE - BIMCO
During the first seven weeks of 2024, Russian coal shipments have fallen 14% y/y. Volumes have gradually declined since October 2023 when logistica ...
Thursday, 22 February 24
BIMCO PUBLISHES SHIP FINANCING FORMS TO ENSURE UNINTERRUPTED USE OF SHIPS
BIMCO has published two standard Quiet Enjoyment Letters (QELs), the first standard form QELs available to the industry, to offer a tool that can e ...
Monday, 19 February 24
METALS INVESTMENT: THE DARKEST HOUR IS JUST BEFORE THE DAWN - WOOD MACKENZIE
Things often seem at their worst just before they get better. In terms of meeting our net zero 2050 scenario, we’ve reached a watershed momen ...
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Showing 31 to 35 news of total 6871 |
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- Banpu Public Company Limited - Thailand
- Kobexindo Tractors - Indoneisa
- Madhucon Powers Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Siam City Cement PLC, Thailand
- Grasim Industreis Ltd - India
- Therma Luzon, Inc, Philippines
- Vedanta Resources Plc - India
- Africa Commodities Group - South Africa
- Leighton Contractors Pty Ltd - Australia
- Semirara Mining Corp, Philippines
- GVK Power & Infra Limited - India
- Chettinad Cement Corporation Ltd - India
- Wood Mackenzie - Singapore
- Manunggal Multi Energi - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Coastal Gujarat Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Bulk Trading Sa - Switzerland
- IHS Mccloskey Coal Group - USA
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- London Commodity Brokers - England
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- TNB Fuel Sdn Bhd - Malaysia
- Indo Tambangraya Megah - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Energy Development Corp, Philippines
- Central Electricity Authority - India
- Coalindo Energy - Indonesia
- Vizag Seaport Private Limited - India
- ASAPP Information Group - India
- Siam City Cement - Thailand
- ICICI Bank Limited - India
- Lanco Infratech Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Ind-Barath Power Infra Limited - India
- Orica Australia Pty. Ltd.
- Heidelberg Cement - Germany
- Romanian Commodities Exchange
- Wilmar Investment Holdings
- Karaikal Port Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Maheswari Brothers Coal Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Georgia Ports Authority, United States
- Ceylon Electricity Board - Sri Lanka
- Samtan Co., Ltd - South Korea
- Jaiprakash Power Ventures ltd
- Binh Thuan Hamico - Vietnam
- Medco Energi Mining Internasional
- Sree Jayajothi Cements Limited - India
- Ambuja Cements Ltd - India
- Bukit Baiduri Energy - Indonesia
- Bhushan Steel Limited - India
- Bukit Makmur.PT - Indonesia
- Marubeni Corporation - India
- Australian Coal Association
- SMC Global Power, Philippines
- McConnell Dowell - Australia
- Rashtriya Ispat Nigam Limited - India
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Indogreen Group - Indonesia
- Economic Council, Georgia
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Sical Logistics Limited - India
- Attock Cement Pakistan Limited
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Cigading International Bulk Terminal - Indonesia
- New Zealand Coal & Carbon
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- LBH Netherlands Bv - Netherlands
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- CNBM International Corporation - China
- Toyota Tsusho Corporation, Japan
- White Energy Company Limited
- Trasteel International SA, Italy
- Holcim Trading Pte Ltd - Singapore
- GN Power Mariveles Coal Plant, Philippines
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Minerals Council of Australia
- Independent Power Producers Association of India
- Petrochimia International Co. Ltd.- Taiwan
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Tata Chemicals Ltd - India
- Coal and Oil Company - UAE
- Latin American Coal - Colombia
- Formosa Plastics Group - Taiwan
- Global Business Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
- Kaltim Prima Coal - Indonesia
- Mjunction Services Limited - India
- Agrawal Coal Company - India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Dalmia Cement Bharat India
- Renaissance Capital - South Africa
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- Anglo American - United Kingdom
- Port Waratah Coal Services - Australia
- The University of Queensland
- India Bulls Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Electricity Authority, New Zealand
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Cement Manufacturers Association - India
- Gujarat Mineral Development Corp Ltd - India
- OPG Power Generation Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- PTC India Limited - India
- Uttam Galva Steels Limited - India
- Globalindo Alam Lestari - Indonesia
- Thiess Contractors Indonesia
- Directorate Of Revenue Intelligence - India
- GAC Shipping (India) Pvt Ltd
- Australian Commodity Traders Exchange
- Interocean Group of Companies - India
- Merrill Lynch Commodities Europe
- Antam Resourcindo - Indonesia
- Aboitiz Power Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Jindal Steel & Power Ltd - India
- PNOC Exploration Corporation - Philippines
- The Treasury - Australian Government
- Alfred C Toepfer International GmbH - Germany
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Iligan Light & Power Inc, Philippines
- Salva Resources Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- Orica Mining Services - Indonesia
- Sojitz Corporation - Japan
- SN Aboitiz Power Inc, Philippines
- San Jose City I Power Corp, Philippines
- Posco Energy - South Korea
- PowerSource Philippines DevCo
- Carbofer General Trading SA - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- MS Steel International - UAE
- Sakthi Sugars Limited - India
- Power Finance Corporation Ltd., India
- Krishnapatnam Port Company Ltd. - India
- Thai Mozambique Logistica
- Standard Chartered Bank - UAE
- Eastern Coal Council - USA
- Straits Asia Resources Limited - Singapore
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- Gujarat Sidhee Cement - India
- Ministry of Transport, Egypt
- Indika Energy - Indonesia
- Electricity Generating Authority of Thailand
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Edison Trading Spa - Italy
- Chamber of Mines of South Africa
- Intertek Mineral Services - Indonesia
- Meenaskhi Energy Private Limited - India
- Savvy Resources Ltd - HongKong
- Pendopo Energi Batubara - Indonesia
- Star Paper Mills Limited - India
- Petron Corporation, Philippines
- Eastern Energy - Thailand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Indian Energy Exchange, India
- Goldman Sachs - Singapore
- VISA Power Limited - India
- IEA Clean Coal Centre - UK
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
- Malabar Cements Ltd - India
- Aditya Birla Group - India
- Oldendorff Carriers - Singapore
- SMG Consultants - Indonesia
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Simpson Spence & Young - Indonesia
- Mercuria Energy - Indonesia
- Central Java Power - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Xindia Steels Limited - India
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Billiton Holdings Pty Ltd - Australia
- Timah Investasi Mineral - Indoneisa
- Planning Commission, India
- Energy Link Ltd, New Zealand
- The State Trading Corporation of India Ltd
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