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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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Wednesday, 27 January 21
MARKET INSIGHT - INTERMODAL
As we have entered the era off renewable energies, all industries globally give max effort to minimize their carbon footprint and consequently thei ...
Monday, 25 January 21
ULTRAMAX YET ANOTHER POSITIVE WEEK FOR THE SECTOR, WHICH SAW INCREASED DEMAND ACROSS ALL BASINS - BALTIC BRIEFING
Capesize
The Capesize market rocked and rolled these past few days. But by weeks end little had changed on the Capesize 5TC as it settled down ...
Monday, 25 January 21
NEW LAW IN CALIFORNIA, USA, AFFECTING SHIPOWNERS' LIABILITY FOR OIL POLLUTION - BIMCO
Members are advised that amendments to the so-called Lempert-Keene-Seastrand Oil Spill Prevention and Response Act of 1990 in the State of Californ ...
Monday, 25 January 21
COAL INDIA SAYS GEARED UP TO MEET SURGE IN FUEL DEMAND FROM POWER SECTOR - PTI
State-owned Coal India Ltd on Saturday said that it is well geared to meet any surge in demand for coal from the power sector.
The s ...
Sunday, 24 January 21
GOVT ASSURES COAL INDIA OF 'FULL SUPPORT', STRESSES ON LEARNING 'NEW THINGS' - PTI
Coal Minister Pralhad Joshi assured Coal India of full government support, even as he said the PSU needs to learn “new things” for impr ...
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- Rio Tinto Coal - Australia
- Parliament of New Zealand
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- Meralco Power Generation, Philippines
- MS Steel International - UAE
- Kobexindo Tractors - Indoneisa
- Carbofer General Trading SA - India
- Ind-Barath Power Infra Limited - India
- Barasentosa Lestari - Indonesia
- Manunggal Multi Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- OPG Power Generation Pvt Ltd - India
- Gujarat Sidhee Cement - India
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- Orica Australia Pty. Ltd.
- Agrawal Coal Company - India
- Wood Mackenzie - Singapore
- New Zealand Coal & Carbon
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Malabar Cements Ltd - India
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- Holcim Trading Pte Ltd - Singapore
- Eastern Coal Council - USA
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
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- The University of Queensland
- SMC Global Power, Philippines
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- Jorong Barutama Greston.PT - Indonesia
- Lanco Infratech Ltd - India
- Economic Council, Georgia
- Indian Oil Corporation Limited
- Posco Energy - South Korea
- Indian Energy Exchange, India
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Deloitte Consulting - India
- Semirara Mining and Power Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Petron Corporation, Philippines
- Grasim Industreis Ltd - India
- GAC Shipping (India) Pvt Ltd
- San Jose City I Power Corp, Philippines
- LBH Netherlands Bv - Netherlands
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Kalimantan Lumbung Energi - Indonesia
- The State Trading Corporation of India Ltd
- Metalloyd Limited - United Kingdom
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Mercuria Energy - Indonesia
- Electricity Authority, New Zealand
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ministry of Transport, Egypt
- Sical Logistics Limited - India
- SMG Consultants - Indonesia
- Antam Resourcindo - Indonesia
- Cement Manufacturers Association - India
- Coal and Oil Company - UAE
- Bank of Tokyo Mitsubishi UFJ Ltd
- Central Electricity Authority - India
- Pendopo Energi Batubara - Indonesia
- Orica Mining Services - Indonesia
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Alfred C Toepfer International GmbH - Germany
- PowerSource Philippines DevCo
- Bhoruka Overseas - Indonesia
- Oldendorff Carriers - Singapore
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Vizag Seaport Private Limited - India
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- Power Finance Corporation Ltd., India
- Jindal Steel & Power Ltd - India
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Meenaskhi Energy Private Limited - India
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
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- Therma Luzon, Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Samtan Co., Ltd - South Korea
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- European Bulk Services B.V. - Netherlands
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- AsiaOL BioFuels Corp., Philippines
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- Binh Thuan Hamico - Vietnam
- Sakthi Sugars Limited - India
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- Maheswari Brothers Coal Limited - India
- Larsen & Toubro Limited - India
- India Bulls Power Limited - India
- Renaissance Capital - South Africa
- Uttam Galva Steels Limited - India
- Dalmia Cement Bharat India
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Krishnapatnam Port Company Ltd. - India
- Bangladesh Power Developement Board
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Bukit Makmur.PT - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Thiess Contractors Indonesia
- Bhatia International Limited - India
- Siam City Cement - Thailand
- Indonesian Coal Mining Association
- PNOC Exploration Corporation - Philippines
- Baramulti Group, Indonesia
- GVK Power & Infra Limited - India
- Price Waterhouse Coopers - Russia
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- Asmin Koalindo Tuhup - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- GMR Energy Limited - India
- Mjunction Services Limited - India
- Gujarat Electricity Regulatory Commission - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Tata Chemicals Ltd - India
- Port Waratah Coal Services - Australia
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Cigading International Bulk Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Leighton Contractors Pty Ltd - Australia
- Planning Commission, India
- Sinarmas Energy and Mining - Indonesia
- Eastern Energy - Thailand
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- South Luzon Thermal Energy Corporation
- Ministry of Finance - Indonesia
- Karaikal Port Pvt Ltd - India
- Energy Development Corp, Philippines
- Banpu Public Company Limited - Thailand
- Romanian Commodities Exchange
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Ceylon Electricity Board - Sri Lanka
- Straits Asia Resources Limited - Singapore
- Australian Commodity Traders Exchange
- Vedanta Resources Plc - India
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- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
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- Australian Coal Association
- Independent Power Producers Association of India
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Tamil Nadu electricity Board
- Mercator Lines Limited - India
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Interocean Group of Companies - India
- White Energy Company Limited
- Coastal Gujarat Power Limited - India
- Singapore Mercantile Exchange
- Africa Commodities Group - South Africa
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- Bulk Trading Sa - Switzerland
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- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
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