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Saturday, 20 June 20
WORLD OIL DEMAND IS PROJECTED TO DECREASE BY 9.1 MB/D IN 2020 - OPEC
Crude Oil Price Movements
Spot crude oil prices rebounded in May from low levels registered a month earlier, as physical market fundamentals improved significantly. The OPEC Reference Basket (ORB) value rose by $7.51, or 42.5%, m-o-m, to stand at $25.17/b. Crude oil futures prices also bounced back in May, amid renewed optimism on the outlook of global oil market fundamentals and expectations for a further recovery of oil demand and tightening global supply. ICE Brent increased by $5.78, or 21.7%, m-o-m to average $32.41/b, and NYMEX WTI soared by $11.83, or 70.8%, m-o-m to average $28.53/b. The contango structure of oil futures prices flattened considerably over the month in all three markets, suggesting that the supply-demand fundamentals are gradually improving. Hedge funds and other money managers turned more positive about the outlook for crude oil prices and continued to raise their combined futures and options net long positions in both ICE Brent and NYMEX WTI contracts.
World Economy
The world economic growth forecast remains unchanged, declining by 3.4% y-o-y in 2020, following global economic growth of 2.9% in 2019. The major economies’ forecasts remain unchanged this month, except for India. The US is forecast to contract by 5.2% in 2020, following growth of 2.3% in 2019. An even larger decline of 8.0% is expected in the Euro-zone 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%, following growth of 6.1% in 2019. India’s forecast was revised down to decline by 0.8%, a sharp slowdown from downwardly revised growth of 4.9% 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
World oil demand is projected to decrease by 9.1 mb/d in 2020, unchanged from the previous month’s assessment. The COVID-19 pandemic has negatively affected global economic activities, eliminating global oil demand growth potential and leading to a y-o-y decline of 6.4 mb/d in 1Q20 and by 17.3 mb/d y-o-y in 2Q20. Transportation fuels are projected to be under pressure during 2020 as lockdowns in various countries particularly the US, Europe, India and the Middle East reduce demand for gasoline and jet fuel, as air travel and distances travelled anticipated to significantly decline compared with a year earlier. Furthermore, decreased manufacturing activities, compared with the previous year, will limit industrial fuel requirements. Petrochemical feedstock is expected to be driven by slower end-user requirements for plastics and plastic products, compared to previous years. Considering the large uncertainties going forward, new data and developments may warrant further revisions in the near term. For 2019, world oil demand growth is kept unchanged at 0.83 mb/d as OECD oil demand declined by 0.10 mb/d while non-OECD oil demand increased by 0.93 mb/d.
World Oil Supply
Non-OPEC liquids production growth in 2020 (including processing gains) is revised up by 0.3 mb/d from the previous month’s assessment and is now forecast to decline by 3.2 mb/d y-o-y. The revision is based on oil production estimations for April and May in non-OPEC countries participating in Declaration of Cooperation (DoC). Strong conformity with the voluntary production adjustments by the 10 non-OPEC participating countries in the DoC led to a drop in crude oil output of more than 2.59 mb/d in May, while OPEC-10 cut 6.25 mb/d m-o-m. At the same time, preliminary oil production outside the DoC showed a decrease by 2.0 mb/d in April and furthermore by 0.8 mb/d in May, mainly in the US and Canada. Oil supply in 2020 is forecast to show growth only in Norway, Brazil, Guyana and Australia. Non-OPEC liquids production growth in 2019 was revised up by 0.01 mb/d owing to a minor upward revision in Latin America’s production in 4Q19 and is now estimated to have grown by 2.03 mb/d to average 65.03 mb/d for the year. OPEC NGLs are estimated to have declined by 0.08 mb/d y-o-y in 2019 to average 5.26 mb/d, while the preliminary 2020 forecast indicates a decline of 0.03 mb/d to average 5.23 mb/d. OPEC crude oil production in May decreased by 6.30 tb/d m-o-m to average 24.19 mb/d, according to secondary sources.
Product Markets and Refining Operations
Refinery margins globally came under heavy pressure and plummeted to record lows on the back of oil product gluts amid stronger feedstock prices. The middle section of the barrel suffered the most as the manufacturing, freight and distribution systems still operate at reduced rates. Although gasoline markets showed some upside, owing to a gradual recovery in mobility as the pandemic restrictions continue to be eased, this was insufficient to prevent the hard downfall in refining economics.
Tanker Market
Dirty tanker rates in May fell from the high levels seen since mid-March. Production adjustments by OPEC and participating non-OPEC countries, as well as other major producers have eased the pressure seen on demand for VLCCs. A decline in product exports amid COVID-19 lockdowns have also kept clean tanker rates subdued, with both reduced refinery runs and weak product demand limiting cargoes. Floating storage has provided some support to both dirty and clean rates, however, levels are seen to be unwinding faster-than-expected.
Crude and Refined Products Trade
Preliminary data for May shows US crude imports recovering slightly to 6.0 mb/d following the arrival of long-haul volumes from the Middle East. US crude exports remained broadly steady at 3.2 mb/d, although a considerable share was headed to floating storage and oversea inventories. Product exports fell sharply in May, accelerating the decline that started in March, as COVID-19 disruptions constricted product demand in Latin America. After bottoming out at 9.7 mb/d in March, China’s crude imports picked up in April, averaging 9.9 mb/d. Preliminary customs data indicates crude imports hit a new record high of 11.3 mb/d in May. Product exports from China reached a new record high of 2.08 mb/d in April, although tanker tracking data points to a sharp fall in exports in the coming months. India’s crude imports dipped in April to average 4.2 mb/d, impacted by the government-ordered lockdown over the month. India’s product imports experienced a continued decline, weighed down by similar factors, averaging below 1.0 mb/d for the first time this year. India’s product exports edged slightly higher in April, as refiners looked to international markets to drain excessively high inventories.
Commercial Stock Movements
Preliminary April data showed that total OECD commercial oil stocks rose by 107.7 mb m-o-m to stand at 3,069 mb. This is 184 mb higher than the same time one year ago and 140.6 mb above the latest five-year average. Within the components, crude and products stocks rose by 58.1 mb and 49.6 mb m-o-m, respectively. OECD crude stocks stood at 57.9 mb above the latest five-year average, while product stocks exhibited a surplus of 82.6 mb compared to the latest five-year average. In terms of days of forward cover, OECD commercial stocks fell by 4.2 days m-o-m in April to stand at 80.7 days. This is 19.9 days above April 2019, and 18.6 days above the latest five-year average.
Balance of Supply and Demand
Demand for OPEC crude in 2019 is revised down by 0.5 mb/d from the previous assessment, standing at 29.4 mb/d, which is 1.1 mb/d lower than the 2018 level. Demand for OPEC crude in 2020 is also revised down by 0.7 mb/d from the previous month, standing at 23.6 mb/d, which is around 5.8 mb/d lower than in the previous year.
Source: OPEC
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Friday, 27 August 21
THE ECONOMICS OF INDONESIA’S DIESEL POWER PLANT TO GAS CONVERSION PLAN ARE PROBLEMATIC - IEEFA
Deploying new small-scale LNG is an uphill battle for PGN
Indonesian gas is currently in a precarious position, where the government needs to ...
Thursday, 26 August 21
INDIA IMPORTED 17.06 MLN TONNES OF LPG IN 2020; UP 11.5% Y-O-Y
Global LPG trade remained fairly positive in 2020, despite the global economic impact from COVID-19, and surged strongly in the first half of 2021. ...
Thursday, 26 August 21
MARKET INSIGHT - INTERMODAL
24th of August 2021, the Baltic Dry Index reached 4,201, a YTD high and the highest since May 2010.
Cape 5TC daily average @ 51,472
...
Tuesday, 24 August 21
COAL PRICE RALLY TO PRESSURE CHINESE POWER GENCOS’ MARGINS FITCH RATINGS
Fitch Ratings expects the pressure on Chinese power generation companies’ (gencos) profit from the recent coal price surge to weaken their cr ...
Tuesday, 24 August 21
TIGHT POWER SUPPLY IN CHINA AMID STRONG DEMAND, HIGH COAL PRICES - FITCH RATINGS
China experienced tight power supply in 1H21 on stronger than expected power demand as economic activity continued to recover, Fitch Ratings says i ...
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- Vedanta Resources Plc - India
- Marubeni Corporation - India
- CNBM International Corporation - China
- European Bulk Services B.V. - Netherlands
- IEA Clean Coal Centre - UK
- Riau Bara Harum - Indonesia
- South Luzon Thermal Energy Corporation
- Heidelberg Cement - Germany
- Aditya Birla Group - India
- Sinarmas Energy and Mining - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Larsen & Toubro Limited - India
- Siam City Cement - Thailand
- New Zealand Coal & Carbon
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Sical Logistics Limited - India
- Grasim Industreis Ltd - India
- TeaM Sual Corporation - Philippines
- Cement Manufacturers Association - India
- Maharashtra Electricity Regulatory Commission - India
- Bharathi Cement Corporation - India
- Siam City Cement PLC, Thailand
- Bhoruka Overseas - Indonesia
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Georgia Ports Authority, United States
- Globalindo Alam Lestari - Indonesia
- MS Steel International - UAE
- White Energy Company Limited
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Edison Trading Spa - Italy
- Mercuria Energy - Indonesia
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Merrill Lynch Commodities Europe
- Kaltim Prima Coal - Indonesia
- India Bulls Power Limited - India
- Binh Thuan Hamico - Vietnam
- Iligan Light & Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Makarim & Taira - Indonesia
- Australian Commodity Traders Exchange
- The Treasury - Australian Government
- Mjunction Services Limited - India
- GAC Shipping (India) Pvt Ltd
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Banpu Public Company Limited - Thailand
- Wilmar Investment Holdings
- Formosa Plastics Group - Taiwan
- Semirara Mining and Power Corporation, Philippines
- Thai Mozambique Logistica
- Antam Resourcindo - Indonesia
- Sree Jayajothi Cements Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Indika Energy - Indonesia
- McConnell Dowell - Australia
- IHS Mccloskey Coal Group - USA
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- GVK Power & Infra Limited - India
- Videocon Industries ltd - India
- Parliament of New Zealand
- Straits Asia Resources Limited - Singapore
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Bukit Baiduri Energy - Indonesia
- Borneo Indobara - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Central Java Power - Indonesia
- Karaikal Port Pvt Ltd - India
- SMG Consultants - Indonesia
- Bangladesh Power Developement Board
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- Renaissance Capital - South Africa
- Ministry of Finance - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Ministry of Mines - Canada
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Baramulti Group, Indonesia
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Standard Chartered Bank - UAE
- Wood Mackenzie - Singapore
- Miang Besar Coal Terminal - Indonesia
- Samtan Co., Ltd - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Sindya Power Generating Company Private Ltd
- Ambuja Cements Ltd - India
- Attock Cement Pakistan Limited
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Vizag Seaport Private Limited - India
- Eastern Energy - Thailand
- Star Paper Mills Limited - India
- Economic Council, Georgia
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Karbindo Abesyapradhi - Indoneisa
- Mercator Lines Limited - India
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Central Electricity Authority - India
- Parry Sugars Refinery, India
- Bhushan Steel Limited - India
- PowerSource Philippines DevCo
- Neyveli Lignite Corporation Ltd, - India
- Carbofer General Trading SA - India
- Jindal Steel & Power Ltd - India
- Electricity Generating Authority of Thailand
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- ASAPP Information Group - India
- Lanco Infratech Ltd - India
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Jaiprakash Power Ventures ltd
- Minerals Council of Australia
- Bukit Makmur.PT - Indonesia
- Malabar Cements Ltd - India
- Kepco SPC Power Corporation, Philippines
- Ministry of Transport, Egypt
- Ceylon Electricity Board - Sri Lanka
- Meralco Power Generation, Philippines
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- VISA Power Limited - India
- Gujarat Electricity Regulatory Commission - India
- Global Coal Blending Company Limited - Australia
- Bhatia International Limited - India
- Metalloyd Limited - United Kingdom
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Planning Commission, India
- San Jose City I Power Corp, Philippines
- AsiaOL BioFuels Corp., Philippines
- Asmin Koalindo Tuhup - Indonesia
- Toyota Tsusho Corporation, Japan
- PTC India Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- Salva Resources Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Energy Development Corp, Philippines
- GMR Energy Limited - India
- PNOC Exploration Corporation - Philippines
- Rio Tinto Coal - Australia
- Therma Luzon, Inc, Philippines
- Oldendorff Carriers - Singapore
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Energy Link Ltd, New Zealand
- Agrawal Coal Company - India
- CIMB Investment Bank - Malaysia
- Tamil Nadu electricity Board
- Jorong Barutama Greston.PT - Indonesia
- Port Waratah Coal Services - Australia
- SN Aboitiz Power Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Latin American Coal - Colombia
- Uttam Galva Steels Limited - India
- Price Waterhouse Coopers - Russia
- OPG Power Generation Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Pendopo Energi Batubara - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Petron Corporation, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Savvy Resources Ltd - HongKong
- Sojitz Corporation - Japan
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Anglo American - United Kingdom
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Essar Steel Hazira Ltd - India
- ICICI Bank Limited - India
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