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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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- Iligan Light & Power Inc, Philippines
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- McConnell Dowell - Australia
- Parry Sugars Refinery, India
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Kohat Cement Company Ltd. - Pakistan
- IHS Mccloskey Coal Group - USA
- Kepco SPC Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Heidelberg Cement - Germany
- Energy Link Ltd, New Zealand
- Electricity Generating Authority of Thailand
- AsiaOL BioFuels Corp., Philippines
- Vizag Seaport Private Limited - India
- ICICI Bank Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Minerals Council of Australia
- Uttam Galva Steels Limited - India
- Indonesian Coal Mining Association
- Coalindo Energy - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Bhatia International Limited - India
- Africa Commodities Group - South Africa
- Grasim Industreis Ltd - India
- Planning Commission, India
- Romanian Commodities Exchange
- Directorate Of Revenue Intelligence - India
- Leighton Contractors Pty Ltd - Australia
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- Bharathi Cement Corporation - India
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- VISA Power Limited - India
- Siam City Cement PLC, Thailand
- Coal and Oil Company - UAE
- Thai Mozambique Logistica
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Georgia Ports Authority, United States
- Formosa Plastics Group - Taiwan
- Cigading International Bulk Terminal - Indonesia
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Baramulti Group, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Asmin Koalindo Tuhup - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- San Jose City I Power Corp, Philippines
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Interocean Group of Companies - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Commonwealth Bank - Australia
- CIMB Investment Bank - Malaysia
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Bayan Resources Tbk. - Indonesia
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Energy Development Corp, Philippines
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Marubeni Corporation - India
- Sojitz Corporation - Japan
- Merrill Lynch Commodities Europe
- Riau Bara Harum - Indonesia
- India Bulls Power Limited - India
- Krishnapatnam Port Company Ltd. - India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Electricity Authority, New Zealand
- Simpson Spence & Young - Indonesia
- Indogreen Group - Indonesia
- MS Steel International - UAE
- Ceylon Electricity Board - Sri Lanka
- Orica Mining Services - Indonesia
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Bhushan Steel Limited - India
- Thiess Contractors Indonesia
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Mercator Lines Limited - India
- Parliament of New Zealand
- Maharashtra Electricity Regulatory Commission - India
- Tamil Nadu electricity Board
- PetroVietnam Power Coal Import and Supply Company
- Orica Australia Pty. Ltd.
- Rashtriya Ispat Nigam Limited - India
- Petron Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Oldendorff Carriers - Singapore
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Australian Coal Association
- Gujarat Sidhee Cement - India
- London Commodity Brokers - England
- Wood Mackenzie - Singapore
- PTC India Limited - India
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Sakthi Sugars Limited - India
- Semirara Mining and Power Corporation, Philippines
- SMC Global Power, Philippines
- Agrawal Coal Company - India
- Banpu Public Company Limited - Thailand
- Bukit Baiduri Energy - Indonesia
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- Bulk Trading Sa - Switzerland
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- GVK Power & Infra Limited - India
- Ministry of Transport, Egypt
- Deloitte Consulting - India
- Kobexindo Tractors - Indoneisa
- Metalloyd Limited - United Kingdom
- Indo Tambangraya Megah - Indonesia
- Videocon Industries ltd - India
- Aboitiz Power Corporation - Philippines
- Miang Besar Coal Terminal - Indonesia
- Binh Thuan Hamico - Vietnam
- Eastern Energy - Thailand
- Eastern Coal Council - USA
- Karbindo Abesyapradhi - Indoneisa
- Sree Jayajothi Cements Limited - India
- Karaikal Port Pvt Ltd - India
- Indian Energy Exchange, India
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Aditya Birla Group - India
- Renaissance Capital - South Africa
- Meralco Power Generation, Philippines
- SMG Consultants - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Mjunction Services Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- GAC Shipping (India) Pvt Ltd
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Mercuria Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Posco Energy - South Korea
- Anglo American - United Kingdom
- The State Trading Corporation of India Ltd
- Rio Tinto Coal - Australia
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Australian Commodity Traders Exchange
- Kumho Petrochemical, South Korea
- Barasentosa Lestari - Indonesia
- OPG Power Generation Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Tata Chemicals Ltd - India
- Global Business Power Corporation, Philippines
- South Luzon Thermal Energy Corporation
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Sarangani Energy Corporation, Philippines
- Ministry of Finance - Indonesia
- Price Waterhouse Coopers - Russia
- Larsen & Toubro Limited - India
- The Treasury - Australian Government
- Dalmia Cement Bharat India
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Independent Power Producers Association of India
- The University of Queensland
- Global Green Power PLC Corporation, Philippines
- Kapuas Tunggal Persada - Indonesia
- White Energy Company Limited
- Indian Oil Corporation Limited
- Ind-Barath Power Infra Limited - India
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bukit Makmur.PT - Indonesia
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Billiton Holdings Pty Ltd - Australia
- Therma Luzon, Inc, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- IEA Clean Coal Centre - UK
- Straits Asia Resources Limited - Singapore
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
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