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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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Tuesday, 29 December 20
CORROSION-RESISTANT STEELS FOR CARGO OIL TANKS - DNV GL
KNOWLEDGE TO ELEVATE
Crude oil is a complex mixture of substances at varying ratios and in most cases contains at least some salt water. ...
Tuesday, 29 December 20
CHINA COKING COAL FUTURES RISE FOR THIRD DAY ON SUPPLY WORRIES - REUTERS
Chinese coking coal futures extended gains into a third session on Monday, jumping as much as 6.2% as lower imports, sliding inventories and mines ...
Wednesday, 23 December 20
COKING COAL'S DECLINE LIKELY TO FOLLOW THE PATH OF THERMAL COAL’S PROGRESSIVE DEMISE - IEEFA
Technology disruption the likely theme of global energy markets in 2021
There has been a growing tsunami of climate commitment annou ...
Wednesday, 23 December 20
MARKET INSIGHT - INTERMODAL
As we all know, China forges more steel than the rest of the world combined, and even during this unprecedented pandemic, the nation is set to brea ...
Tuesday, 22 December 20
2021 DRY BULK OUTLOOK - SUPPLY GROWTH - TORVALD KLAVENESS
In the first article in the series we mentioned that dry bulk freight was in a super cycle between 2001 and 2008. The growth in global yard capacit ...
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- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Electricity Generating Authority of Thailand
- Port Waratah Coal Services - Australia
- Sarangani Energy Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Makarim & Taira - Indonesia
- Kumho Petrochemical, South Korea
- Latin American Coal - Colombia
- Mjunction Services Limited - India
- European Bulk Services B.V. - Netherlands
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Central Electricity Authority - India
- Trasteel International SA, Italy
- Bhushan Steel Limited - India
- ASAPP Information Group - India
- Petron Corporation, Philippines
- Central Java Power - Indonesia
- Kobexindo Tractors - Indoneisa
- Independent Power Producers Association of India
- PowerSource Philippines DevCo
- Pendopo Energi Batubara - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Africa Commodities Group - South Africa
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Salva Resources Pvt Ltd - India
- Australian Commodity Traders Exchange
- Maheswari Brothers Coal Limited - India
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Parliament of New Zealand
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Global Business Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Offshore Bulk Terminal Pte Ltd, Singapore
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Formosa Plastics Group - Taiwan
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Indian Oil Corporation Limited
- Jindal Steel & Power Ltd - India
- Uttam Galva Steels Limited - India
- Bulk Trading Sa - Switzerland
- Bahari Cakrawala Sebuku - Indonesia
- Tata Chemicals Ltd - India
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
- Economic Council, Georgia
- Directorate Of Revenue Intelligence - India
- OPG Power Generation Pvt Ltd - India
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Siam City Cement - Thailand
- TNB Fuel Sdn Bhd - Malaysia
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Goldman Sachs - Singapore
- Simpson Spence & Young - Indonesia
- Coastal Gujarat Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- SMG Consultants - Indonesia
- Thai Mozambique Logistica
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Eastern Energy - Thailand
- Energy Development Corp, Philippines
- Anglo American - United Kingdom
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Planning Commission, India
- Riau Bara Harum - Indonesia
- Aditya Birla Group - India
- Videocon Industries ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Mintek Dendrill Indonesia
- Georgia Ports Authority, United States
- Sree Jayajothi Cements Limited - India
- Vedanta Resources Plc - India
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Indika Energy - Indonesia
- Borneo Indobara - Indonesia
- Marubeni Corporation - India
- PNOC Exploration Corporation - Philippines
- Power Finance Corporation Ltd., India
- Miang Besar Coal Terminal - Indonesia
- GMR Energy Limited - India
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- CIMB Investment Bank - Malaysia
- Antam Resourcindo - Indonesia
- Jaiprakash Power Ventures ltd
- San Jose City I Power Corp, Philippines
- Coalindo Energy - Indonesia
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- Bhatia International Limited - India
- Larsen & Toubro Limited - India
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Price Waterhouse Coopers - Russia
- Singapore Mercantile Exchange
- Coal and Oil Company - UAE
- Bukit Baiduri Energy - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Global Green Power PLC Corporation, Philippines
- Romanian Commodities Exchange
- Indian Energy Exchange, India
- Essar Steel Hazira Ltd - India
- IHS Mccloskey Coal Group - USA
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Lanco Infratech Ltd - India
- Toyota Tsusho Corporation, Japan
- Ministry of Transport, Egypt
- Kepco SPC Power Corporation, Philippines
- Madhucon Powers Ltd - India
- Orica Australia Pty. Ltd.
- Chettinad Cement Corporation Ltd - India
- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- International Coal Ventures Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- Star Paper Mills Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- White Energy Company Limited
- Heidelberg Cement - Germany
- Grasim Industreis Ltd - India
- Barasentosa Lestari - Indonesia
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Wilmar Investment Holdings
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Sojitz Corporation - Japan
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- ICICI Bank Limited - India
- Dalmia Cement Bharat India
- Eastern Coal Council - USA
- SN Aboitiz Power Inc, Philippines
- Standard Chartered Bank - UAE
- London Commodity Brokers - England
- Semirara Mining and Power Corporation, Philippines
- VISA Power Limited - India
- MS Steel International - UAE
- Thiess Contractors Indonesia
- TeaM Sual Corporation - Philippines
- PTC India Limited - India
- Ministry of Finance - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Kideco Jaya Agung - Indonesia
- Meralco Power Generation, Philippines
- Karaikal Port Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Ind-Barath Power Infra Limited - India
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Mercator Lines Limited - India
- Bangladesh Power Developement Board
- Orica Mining Services - Indonesia
- Rio Tinto Coal - Australia
- Minerals Council of Australia
- Leighton Contractors Pty Ltd - Australia
- Ambuja Cements Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- Bukit Makmur.PT - Indonesia
- Interocean Group of Companies - India
- The University of Queensland
- The Treasury - Australian Government
- New Zealand Coal & Carbon
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
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