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Wednesday, 29 April 20
OIL CLOSES IN ON PEAK OVERSUPPLY - WOOD MACKENZIE
Are we now deep in the abyss? Up to our necks in it, if the oil price is any guide. Brent has now tested sub-US$20/bbl in this downturn and WTI sub-zero, albeit briefly and in somewhat freakish circumstances. Where are the signs of stress across the oil value chain? And what are the prospects of finding an exit route to recovery? I talked it through with Ann-Louise Hittle of our Macro Oils team.
First, oil demand, which we think may be close to bottoming out. Decline has been sharp and deep as Covid-19 takes its toll on global economic activity. Much of the world is currently in lockdown, with more than 65% of the world’s population under travel restrictions. Global air travel and car use have nosedived in many countries. The big hit has been on jet fuel demand (down 50% year-on-year) and gasoline (down 25%). Diesel and fuel oil – used to transport goods by truck, ship and rail – have held relatively steady.
The net effect will be April’s demand falling by an average of 15 million to 18 million b/d year on year, based on the early April forecast from our Macro Oils Service. It’s a big number but may be bigger still on certain days or weeks in April and May. Some estimates have suggested declines of 20 million b/d or more.
A key question is when the global economic recovery that’s needed to kick start oil demand growth again will begin. Right now, we appear to be in limbo. India, France and the UK, among other big economies, have extended lockdowns into May. Italy, Spain, Austria and others have started to ease restrictions while several US states are considering re-opening in May. There are early signs of US gasoline demand stabilising.
China though is the model to watch as it emerges from lockdown. It has already started ratcheting up crude purchases in April to supply a reviving economy.
Second, inventory is building at superfast rates globally. Cushing, Oklahoma, is a microcosm of the wider picture. Oil prices in Texas have incentivised producers to send crude to the Cushing hub; weak demand from refineries in the Mid-West and Gulf Coast have kept it there. Storage tanks are filling up rapidly – the three largest weekly builds on record were in consecutive weeks from late March, based on Genscape’s proprietary twice-weekly tank monitoring.
Cushing’s tightening storage capacity played a central role in WTI’s ignominious dive into negative prices on 20 April, ahead of the May contract expiry. Traders and financial players were effectively ambushed – having to pay counterparties up to US$37/bbl to roll out of their expiring May contracts and into June.
Storage globally will stay tight so long as oversupply persists. Genscape estimates Cushing‘s spare capacity of up to 15 million b/d will be full within weeks, and other landlocked hubs – the Caspian for one – are in a similar position. But in reality, producers everywhere are worried their crude won’t be able to find a home.
Third, the world is still awash with supply, which unlike demand is still close to pre-crisis levels. Low prices have killed off new investment but have not yet had much impact on production. So far, we estimate barely one million b/d of onstream non-OPEC production has been shut in.
These are sizeable volumes but, given the scale of the market oversupply, insignificant. We estimate over 15 million b/d of production generates negative operating cash flow, now that prices have lurched lower. As storage fills up, more wells and fields will be shut-in during the coming weeks. Curtailed volumes will quickly mount up.
What must happen for the oil market to start rebalancing and prices to recover? May is important for supply, with OPEC+ cuts taking effect and removing up to 7 million b/d from the market by the end of the month. We expect a slow return to “normal” life in H2 2020 to help demand recover, though most likely staying below pre-crisis levels.
A strong bounce in demand as the world emerges from recession will be needed to soak up the overhang of inventory, which threatens to reach record levels by summer. Nothing, however, can be taken for granted while coronavirus still poses a threat to economic – and social – activity.
Source: Wood Mackenzie
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Saturday, 25 April 20
KOREA SOUTH-EAST POWER CO. INVITED BIDS FOR 780K - 900K MT OF 5600 NCV COAL FOR JULY TO OCTOBER 2020 LOADING
COALspot.com: South Korea’s KOREA SOUTH-EAST POWER CO., LTD. (KOEN) has issued an international tender for 780,000~900,000 Metric Tons (MT) s ...
Saturday, 25 April 20
SEAFARER MENTAL WELLBEING DURING THE COVID-19 PANDEMIC - STANDARD CLUB
KNOWLEDGE TO ELEVATE
COVID-19 has forced many parts of the world to enforce a lockdown in a bid to flatten the curve in terms of transmissions ...
Friday, 24 April 20
KOMIPO INVITED BIDS FOR 5700 NAR COAL FOR JUNE & JULY LOADING
COALspot.com: South Korea’s Korea Midland Power Co. Ltd. (KOMIPO) Has Issued An International Tender For 260,000 Metric Tons (MT) Steam Coal ...
Friday, 24 April 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 24 April 20
COAL INDIA TO PRODUCE 710 MT COAL - MINISTER OF COAL AND MINES
Coal India Limited (CIL) will produce 710 million tonnes (MT) of coal and company’s coal off take target will also remain at710 MT for this f ...
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- Carbofer General Trading SA - India
- OPG Power Generation Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Parliament of New Zealand
- PNOC Exploration Corporation - Philippines
- Edison Trading Spa - Italy
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- Riau Bara Harum - Indonesia
- Bukit Baiduri Energy - Indonesia
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Indonesian Coal Mining Association
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Intertek Mineral Services - Indonesia
- Romanian Commodities Exchange
- Bhoruka Overseas - Indonesia
- Dalmia Cement Bharat India
- Ministry of Mines - Canada
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Sical Logistics Limited - India
- Chamber of Mines of South Africa
- Metalloyd Limited - United Kingdom
- Salva Resources Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Leighton Contractors Pty Ltd - Australia
- MS Steel International - UAE
- Central Java Power - Indonesia
- Singapore Mercantile Exchange
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Indian Oil Corporation Limited
- Iligan Light & Power Inc, Philippines
- AsiaOL BioFuels Corp., Philippines
- India Bulls Power Limited - India
- Siam City Cement - Thailand
- Central Electricity Authority - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Timah Investasi Mineral - Indoneisa
- Star Paper Mills Limited - India
- Wood Mackenzie - Singapore
- Commonwealth Bank - Australia
- Krishnapatnam Port Company Ltd. - India
- Kapuas Tunggal Persada - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Banpu Public Company Limited - Thailand
- Indogreen Group - Indonesia
- Meenaskhi Energy Private Limited - India
- The Treasury - Australian Government
- Indika Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Maheswari Brothers Coal Limited - India
- Aditya Birla Group - India
- Kohat Cement Company Ltd. - Pakistan
- Gujarat Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Holcim Trading Pte Ltd - Singapore
- Aboitiz Power Corporation - Philippines
- PTC India Limited - India
- Manunggal Multi Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Coalindo Energy - Indonesia
- CNBM International Corporation - China
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- PowerSource Philippines DevCo
- Bulk Trading Sa - Switzerland
- Attock Cement Pakistan Limited
- Cement Manufacturers Association - India
- Jorong Barutama Greston.PT - Indonesia
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Kumho Petrochemical, South Korea
- Energy Link Ltd, New Zealand
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- SMG Consultants - Indonesia
- Tata Chemicals Ltd - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- SMC Global Power, Philippines
- Formosa Plastics Group - Taiwan
- Jindal Steel & Power Ltd - India
- Bhatia International Limited - India
- Kartika Selabumi Mining - Indonesia
- White Energy Company Limited
- Indian Energy Exchange, India
- GN Power Mariveles Coal Plant, Philippines
- Mercuria Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Baramulti Group, Indonesia
- Straits Asia Resources Limited - Singapore
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Eastern Coal Council - USA
- Altura Mining Limited, Indonesia
- IHS Mccloskey Coal Group - USA
- Savvy Resources Ltd - HongKong
- Global Business Power Corporation, Philippines
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Wilmar Investment Holdings
- Ceylon Electricity Board - Sri Lanka
- Billiton Holdings Pty Ltd - Australia
- Sree Jayajothi Cements Limited - India
- Bangladesh Power Developement Board
- Directorate Of Revenue Intelligence - India
- Sakthi Sugars Limited - India
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Borneo Indobara - Indonesia
- Tamil Nadu electricity Board
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- Planning Commission, India
- Medco Energi Mining Internasional
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Ministry of Finance - Indonesia
- Gujarat Sidhee Cement - India
- Electricity Authority, New Zealand
- Kepco SPC Power Corporation, Philippines
- Malabar Cements Ltd - India
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- VISA Power Limited - India
- Mjunction Services Limited - India
- Orica Australia Pty. Ltd.
- Makarim & Taira - Indonesia
- Eastern Energy - Thailand
- Minerals Council of Australia
- Xindia Steels Limited - India
- Interocean Group of Companies - India
- Madhucon Powers Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Energy Development Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Trasteel International SA, Italy
- Global Green Power PLC Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- The University of Queensland
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Bharathi Cement Corporation - India
- London Commodity Brokers - England
- Africa Commodities Group - South Africa
- Meralco Power Generation, Philippines
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Bukit Asam (Persero) Tbk - Indonesia
- The State Trading Corporation of India Ltd
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Maharashtra Electricity Regulatory Commission - India
- TeaM Sual Corporation - Philippines
- Chettinad Cement Corporation Ltd - India
- Standard Chartered Bank - UAE
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Coal and Oil Company - UAE
- Mintek Dendrill Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Essar Steel Hazira Ltd - India
- Anglo American - United Kingdom
- Simpson Spence & Young - Indonesia
- Siam City Cement PLC, Thailand
- LBH Netherlands Bv - Netherlands
- TNB Fuel Sdn Bhd - Malaysia
- Bayan Resources Tbk. - Indonesia
- Barasentosa Lestari - Indonesia
- Vedanta Resources Plc - India
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