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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, 29 May 20
DRY BULK SHIPPING: NO QUICK RECOVERY FOR THE DRY BULK MARKET AS COVID-19 DIGS DEEPER
The outlook is poor for dry bulk, as the negative demand shock and overcapacity come together to send rates to multi-year lows, even a return to wo ...
Thursday, 28 May 20
COVID-19: A FORCE MAJEURE EVENT? - KYPRIANOU
KNOWLEDGE TO ELEVATE
While seeing the unexpected COVID-19 outbreak expanding worldwide and the first cases being identified in Cyprus, the com ...
Thursday, 28 May 20
OIL DEMAND RECOVERED BY 20% IN MAY AGAINST APRIL: RUSSIAN ENERGY MINISTER - TASS
Oil demand remains at a low level but the demand in May increased by 20% against April, Russian Energy Minister Alexander Novak said, cited by the ...
Thursday, 28 May 20
MARKET INSIGHT - INTERMODAL
Earlier in May, China’s top leaders convened for the annual National People's Congress, following over two months of delays due to the co ...
Wednesday, 27 May 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX UP 0.94 PCT - XINHUA
China Taiyuan coal transaction price index stood at 125.03 points Monday, up 0.94 percent week on week.
The index, released by China ...
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- Bharathi Cement Corporation - India
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Renaissance Capital - South Africa
- Salva Resources Pvt Ltd - India
- Lanco Infratech Ltd - India
- Indika Energy - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- McConnell Dowell - Australia
- Intertek Mineral Services - Indonesia
- ASAPP Information Group - India
- Directorate Of Revenue Intelligence - India
- Kideco Jaya Agung - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Kepco SPC Power Corporation, Philippines
- TeaM Sual Corporation - Philippines
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- Georgia Ports Authority, United States
- Jaiprakash Power Ventures ltd
- South Luzon Thermal Energy Corporation
- San Jose City I Power Corp, Philippines
- Marubeni Corporation - India
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- Gujarat Mineral Development Corp Ltd - India
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- Coal and Oil Company - UAE
- Aboitiz Power Corporation - Philippines
- Medco Energi Mining Internasional
- Bhatia International Limited - India
- Meenaskhi Energy Private Limited - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Trasteel International SA, Italy
- Kumho Petrochemical, South Korea
- Globalindo Alam Lestari - Indonesia
- SN Aboitiz Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Savvy Resources Ltd - HongKong
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Heidelberg Cement - Germany
- Electricity Authority, New Zealand
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- PetroVietnam Power Coal Import and Supply Company
- Thai Mozambique Logistica
- Oldendorff Carriers - Singapore
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Vedanta Resources Plc - India
- ICICI Bank Limited - India
- Ind-Barath Power Infra Limited - India
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Wilmar Investment Holdings
- The State Trading Corporation of India Ltd
- Bayan Resources Tbk. - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Mjunction Services Limited - India
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- The University of Queensland
- Gujarat Sidhee Cement - India
- Price Waterhouse Coopers - Russia
- Altura Mining Limited, Indonesia
- Agrawal Coal Company - India
- Rio Tinto Coal - Australia
- Africa Commodities Group - South Africa
- Anglo American - United Kingdom
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Sojitz Corporation - Japan
- Bank of Tokyo Mitsubishi UFJ Ltd
- European Bulk Services B.V. - Netherlands
- Ministry of Finance - Indonesia
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- GMR Energy Limited - India
- VISA Power Limited - India
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- India Bulls Power Limited - India
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- Australian Coal Association
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- Tata Chemicals Ltd - India
- Alfred C Toepfer International GmbH - Germany
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- Larsen & Toubro Limited - India
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- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Green Power PLC Corporation, Philippines
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- SMC Global Power, Philippines
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- Cement Manufacturers Association - India
- Indian Oil Corporation Limited
- Standard Chartered Bank - UAE
- Economic Council, Georgia
- Kaltim Prima Coal - Indonesia
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- Ceylon Electricity Board - Sri Lanka
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- New Zealand Coal & Carbon
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- Deloitte Consulting - India
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- Mintek Dendrill Indonesia
- IEA Clean Coal Centre - UK
- Chettinad Cement Corporation Ltd - India
- Semirara Mining and Power Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Energy Development Corp, Philippines
- Planning Commission, India
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- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- Attock Cement Pakistan Limited
- International Coal Ventures Pvt Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sree Jayajothi Cements Limited - India
- CIMB Investment Bank - Malaysia
- PNOC Exploration Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Parliament of New Zealand
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Siam City Cement PLC, Thailand
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Dalmia Cement Bharat India
- Sakthi Sugars Limited - India
- Orica Mining Services - Indonesia
- SMG Consultants - Indonesia
- Commonwealth Bank - Australia
- Neyveli Lignite Corporation Ltd, - India
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- AsiaOL BioFuels Corp., Philippines
- Essar Steel Hazira Ltd - India
- Global Coal Blending Company Limited - Australia
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- London Commodity Brokers - England
- Bahari Cakrawala Sebuku - Indonesia
- Bukit Makmur.PT - Indonesia
- Aditya Birla Group - India
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Kohat Cement Company Ltd. - Pakistan
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- Petrochimia International Co. Ltd.- Taiwan
- Samtan Co., Ltd - South Korea
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- PTC India Limited - India
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- Gujarat Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Bangladesh Power Developement Board
- Mercuria Energy - Indonesia
- Carbofer General Trading SA - India
- Orica Australia Pty. Ltd.
- GAC Shipping (India) Pvt Ltd
- The Treasury - Australian Government
- Makarim & Taira - Indonesia
- MS Steel International - UAE
- Holcim Trading Pte Ltd - Singapore
- Edison Trading Spa - Italy
- CNBM International Corporation - China
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- Baramulti Group, Indonesia
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- Siam City Cement - Thailand
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