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Thursday, 14 May 20
OPEC REVISES DOWN GLOBAL OIL DEMAND FORECAST AGAIN
 Crude Oil Price Movements
Crude oil prices recorded a second sharp monthly drop in April, amid an increasing oil surplus in the spot market. The OPEC Reference Basket (ORB) value plummeted by $16.26, or 48.0%, m-o-m, to $17.66/b, the lowest monthly level since December 2001. With regard to crude futures, ICE Brent declined by $7.10, or 21%, to average $26.63/b, while NYMEX WTI fell by $13.75, or 45.2%, to average $16.70/b. The contango structure of the forward curves of all crude futures benchmarks steepened further, on further worsening of global oil market fundamentals and a rapid increase in global oil inventories. Money managers firmly raised their combined futures and options net long positions in April in both ICE Brent and NYMEX WTI contracts.
World Economy
The world economy is forecast to face a recession in 2020, declining by 3.4%, following global economic growth of 2.9% in the previous year. Within the OECD, the US is forecast to contract by 5.2% 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 8.0% in 2020, compared to growth of 1.2% in 2019. Japan is forecast to contract by 5.1% in 2020, comparing to growth of 0.7% in 2019. China’s 2020 GDP is forecast to grow by 1.3%, recovering from a sharp contraction in 1Q20, and following growth of 6.1% in 2019. India is forecast to decline by 0.2%, a sharp slowdown from already weakening growth of 5.3% in 2019. Brazil’s economy is forecast to contract by 6.0% in 2020, following growth of 1.1% in 2019. Russia’s economy is forecast to contract by 4.5% in 2020, after growth of 1.3% in 2019, not only due to COVID-19, but also because of the considerable decline in oil prices.
World Oil Demand
For 2019, world oil demand growth is kept broadly unchanged compared to last month’s assessment, estimated to have grown by 0.83 mb/d, y-o-y, to average 98.72 mb/d. In 2020, world oil demand growth is adjusted lower by 2.23 mb/d and is now forecast to drop by 9.07 mb/d. However, the worst contraction in major oil demand centers around the world is expected to take place in the 2Q20, mostly in OECD Americas and Europe, with transportation and industrial fuels affected the most. As such, OECD oil demand is now revised lower by 1.20 mb/d while non-OECD oil demand growth was adjusted down by 1.03 mb/d, for total oil demand to reach 90.59 mb/d. Indeed, demand contraction in 2020 can be mitigated with sooner than expected easing of government COVID-19 related measures, and faster response of economic growth to the implemented extraordinary stimulus packages.
World Oil Supply
The non-OPEC oil supply growth estimate in 2019 is now revised up slightly by 0.04 mb/d from the previous month’s assessment, due to an upward revision in Australia’s production data, and is estimated to have grown by 2.02 mb/d. For 2020, non-OPEC oil supply is revised down further by almost 2.0 mb/d from the previous projection, and is now forecast to decline by 3.5 mb/d. The main revisions of the month are based on production shut-ins or curtailment plans announced by oil companies – including the majors – particularly in North America. Globally, not including the countries participating in the Declaration of Cooperation (DoC) and as of 6 May 2020, around 3.6 mb/d of production cuts have been announced, so far, in response to the lack of demand, low oil prices, excess supply and limited storage capacity. The 2020 oil supply growth forecast for the US is revised down by 1.3 mb/d to now show a decline of 1.4 mb/d y-o-y. Other large downward revisions are undertaken for Canada and Brazil by 0.3 mb/d and 0.1 mb/d, respectively. Oil supply in 2020 is 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 is forecast to grow by 0.04 mb/d to average 4.83 mb/d. In April, OPEC crude oil production increased by 1.80 mb/d m-o-m to average 30.41 mb/d, according to secondary sources
Product Markets and Refining
Operations Refinery margins in the Atlantic Basin rebounded in April. Deeper refinery intake cuts as well as low feedstock prices helped offset weak demand. In addition, the relaxation of confinement measures in the US and Europe amid the onset of the driving season, provided much-needed stimulus to the top of the barrel. In Asia, however, stronger product availability, as refineries increased processing rates, outpaced product inventory drawdowns amid a lack of demand from overseas, weighed on the regional product market.
Tanker Market
April was a stellar month for the tanker market with both dirty and clean rates seeing spikes during the month. Dirty freight rates peaked early in April and then trended lower, although remaining at relatively high levels. Rates were supported by a surge in tanker demand, driven by low crude prices and a need to push out excess supplies amid concerns about the availability of onshore storage capacity. Meanwhile, clean tanker rates jumped to historic highs in the middle of April, as refiners and traders looked to boosting product exports and turned to floating storage. However, rates returned to more typical levels by the end of the month. The expected voluntary and involuntary production reductions are expected to weigh on tanker demand in the coming months, although increased floating storage will provided offsetting support.
Crude and Refined Products Trade
According to preliminary data, US crude imports in April fell to 5.4 mb/d – the lowest since 1992 – while the country’s crude exports averaged 3.2 mb/d, down from a peak of 3.7 mb/d in February 2020. In March, China’s crude imports averaged 9.7 mb/d, falling below 10 mb/d for the first time in eight months. Product exports from China surged to 1.85 mb/d, the second highest level on record, led by a jump in diesel exports. India’s crude imports dipped in March to average 4.6 mb/d, impacted by the government-ordered lockdown which began toward the end of the month. India’s product exports rose 10% m-o-m, supported by an increase in diesel exports. Crude imports into Japan increased for the first time in two months, averaging 3.1 mb/d in March, while product imports and exports were slightly lower. The latest official data for OECD Europe shows crude exports continuing to fall in January, reaching 2.2 mb/d.
Commercial Stock Movements
OECD commercial oil stocks rose by 57.7 mb m-o-m in March to stand at 3,002 mb. This was 125.8 mb higher than the same time one year ago and 88.6 mb above the latest five-year average. Within components, crude stocks surged by 49.1 mb, while product stocks rose by 8.6 mb, m-o-m. In terms of days of forward cover, OECD commercial stocks surged by 8.9 days m-o-m in March to stand at 86.1 days. This was 25.1 days above March 2019, and 23.8 days above the latest five-year average. Preliminary data for April showed that US total commercial oil stocks surged by 81.1 mb m-o-m to stand at 1,395 mb. This was 136.1 mb, or 10.8%, above the same period a year ago, and 123.7 mb, or 9.7%, higher than the latest five-year average. Within components, crude stocks climbed by 47.9 mb, and product stocks rose by 33.2 mb m-o-m in April. Balance of
Supply and Demand
Demand for OPEC crude in 2019 stood at 29.8 mb/d, 1.2 mb/d lower than the 2018 level. For 2020, and following the recent agreement reached at the extraordinary OPEC and non-OPEC Ministerial Meetings in April, demand for OPEC crude is expected at 24.3 mb/d, which is 5.6 mb/d lower than the 2019 level. It is worth noting that demand for OPEC crude in 2020 remained almost the same as last month’s assessment, both considering the voluntary adjustment volumes under the Declaration of Cooperation (DoC) framework. However, additional reductions recently announced by several OPEC member countries, above and beyond their voluntary commitments under DoC, are expected to expedite market re-balancing, and improve the demand for OPEC crude in 2020.
Source: OPEC
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Friday, 08 May 20
THE COLLAPSE OF THE OIL AND BUNKER FUEL MARKETS IN EARLY 2020 - PETER SAND
The sulphur regulation from the International Maritime Organization (IMO) that came into force on 1 January 2020 took the centre stage in the shipp ...
Friday, 08 May 20
LNG DEMAND FACED SEVERAL HEADWINDS IN THE FIRST QUARTER OF 2020 - GASLOG
LNG demand faced several headwinds in the first quarter of 2020 including a warmer than average winter in the northern hemisphere, high inventory l ...
Thursday, 07 May 20
IEEFA UPDATE: THE OUTLOOK FOR THERMAL COAL IN SOUTHEAST ASIA AND SOUTH ASIA
Seven headwinds are building to sustained growth in coal in Asia
The medium term outlook for thermal coal in Southeast Asia is posit ...
Thursday, 07 May 20
IMO 2020: BUNKER CLAIMS HANDLING GUIDE FOR A NEW DECADE - THE STANDARD CLUB
KNOWLEDGE TO ELEVATE
IMO 2020 is the term generally used to describe the following regulations under Annex VI of the International Convention ...
Thursday, 07 May 20
CRUDE OIL TANKER EARNINGS DROP 68% IN NINE DAYS - BIMCO
Crude oil tanker earnings have come down sharply in recent weeks with Very Large Crude Carrier (VLCC) earnings from the Middle East Gulf to China d ...
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- OPG Power Generation Pvt Ltd - India
- Orica Australia Pty. Ltd.
- Bhushan Steel Limited - India
- CIMB Investment Bank - Malaysia
- Karaikal Port Pvt Ltd - India
- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Dalmia Cement Bharat India
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Grasim Industreis Ltd - India
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Indogreen Group - Indonesia
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- GAC Shipping (India) Pvt Ltd
- Binh Thuan Hamico - Vietnam
- Metalloyd Limited - United Kingdom
- Gujarat Sidhee Cement - India
- Romanian Commodities Exchange
- Central Electricity Authority - India
- CNBM International Corporation - China
- Gujarat Electricity Regulatory Commission - India
- Ind-Barath Power Infra Limited - India
- Chamber of Mines of South Africa
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Bukit Makmur.PT - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Interocean Group of Companies - India
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Renaissance Capital - South Africa
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Electricity Authority, New Zealand
- Globalindo Alam Lestari - Indonesia
- Posco Energy - South Korea
- Independent Power Producers Association of India
- Eastern Coal Council - USA
- Leighton Contractors Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Cement Manufacturers Association - India
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- PowerSource Philippines DevCo
- GN Power Mariveles Coal Plant, Philippines
- Makarim & Taira - Indonesia
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Malabar Cements Ltd - India
- SN Aboitiz Power Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Simpson Spence & Young - Indonesia
- Kumho Petrochemical, South Korea
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Port Waratah Coal Services - Australia
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Global Business Power Corporation, Philippines
- Siam City Cement - Thailand
- Aditya Birla Group - India
- Rashtriya Ispat Nigam Limited - India
- Jaiprakash Power Ventures ltd
- Alfred C Toepfer International GmbH - Germany
- McConnell Dowell - Australia
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Parry Sugars Refinery, India
- Medco Energi Mining Internasional
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Georgia Ports Authority, United States
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Kartika Selabumi Mining - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Jindal Steel & Power Ltd - India
- Indo Tambangraya Megah - Indonesia
- VISA Power Limited - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- Orica Mining Services - Indonesia
- Ministry of Transport, Egypt
- International Coal Ventures Pvt Ltd - India
- India Bulls Power Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- San Jose City I Power Corp, Philippines
- Borneo Indobara - Indonesia
- Wood Mackenzie - Singapore
- Bukit Baiduri Energy - Indonesia
- Indian Energy Exchange, India
- Australian Coal Association
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- Carbofer General Trading SA - India
- Thai Mozambique Logistica
- Edison Trading Spa - Italy
- Bhoruka Overseas - Indonesia
- Coal and Oil Company - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Ceylon Electricity Board - Sri Lanka
- The University of Queensland
- Kohat Cement Company Ltd. - Pakistan
- Singapore Mercantile Exchange
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Sakthi Sugars Limited - India
- Eastern Energy - Thailand
- Krishnapatnam Port Company Ltd. - India
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Gujarat Mineral Development Corp Ltd - India
- Global Green Power PLC Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Ministry of Mines - Canada
- White Energy Company Limited
- Minerals Council of Australia
- Karbindo Abesyapradhi - Indoneisa
- LBH Netherlands Bv - Netherlands
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Bharathi Cement Corporation - India
- Kaltim Prima Coal - Indonesia
- Energy Development Corp, Philippines
- PTC India Limited - India
- Indika Energy - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- Straits Asia Resources Limited - Singapore
- Tamil Nadu electricity Board
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
- Larsen & Toubro Limited - India
- Chettinad Cement Corporation Ltd - India
- Toyota Tsusho Corporation, Japan
- Coalindo Energy - Indonesia
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Wilmar Investment Holdings
- Tata Chemicals Ltd - India
- Agrawal Coal Company - India
- South Luzon Thermal Energy Corporation
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Savvy Resources Ltd - HongKong
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Goldman Sachs - Singapore
- Semirara Mining Corp, Philippines
- Indian Oil Corporation Limited
- Bahari Cakrawala Sebuku - Indonesia
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Petron Corporation, Philippines
- Riau Bara Harum - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- TeaM Sual Corporation - Philippines
- Trasteel International SA, Italy
- Sarangani Energy Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Siam City Cement PLC, Thailand
- Mjunction Services Limited - India
- Barasentosa Lestari - Indonesia
- Parliament of New Zealand
- London Commodity Brokers - England
- Bhatia International Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Pendopo Energi Batubara - Indonesia
- Sojitz Corporation - Japan
- Vijayanagar Sugar Pvt Ltd - India
- Videocon Industries ltd - India
- Africa Commodities Group - South Africa
- Mercuria Energy - Indonesia
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
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