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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, 20 May 20
ADARO ENERGY BOOKED A 5% INCREASE IN COAL PRODUCTION VOLUME Y-O-Y IN 1Q2020
PT. Adaro Energy Tbk, Indonesia’s one of the largest coal miner, booked a 5% increase in coal production volume year-over-year in 1Q2020. The ...
Wednesday, 20 May 20
BRAZIL SOYBEAN EXPORTS HAVE BEEN SURGING THIS YEAR - BANCHERO COSTA
Brazil soybean exports have been surging this year, thanks to a combination of strong demand from China, a bumper crop, and favourable exchange rat ...
Wednesday, 20 May 20
MARKET INSIGHT
Seafarers keep maritime trade going so that the food, raw materials, energy and manufactured goods on which so many depend can continue moving arou ...
Tuesday, 19 May 20
AMENDMENT OF THE INDONESIAN MINING LAW: TYING UP LOOSE ENDS - UMBRA
KNOWLEDGE TO ELEVATE
The finalized draft of Law on the amendment of the Mining Law (Bill) was publicly released on 11 May 2020 and was then ap ...
Monday, 18 May 20
TAKING ADVANTAGE OF VIRUS DISTRACTION - BALTIC EXCHANGE
As the industry grapples to deal with exceptional Covid-19-related challenges, a deeper threat is coming to the fore. At this time of crisis, more ...
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- GMR Energy Limited - India
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Parry Sugars Refinery, India
- Central Electricity Authority - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Georgia Ports Authority, United States
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- Eastern Energy - Thailand
- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Bayan Resources Tbk. - Indonesia
- Eastern Coal Council - USA
- Planning Commission, India
- Tamil Nadu electricity Board
- Gujarat Electricity Regulatory Commission - India
- Posco Energy - South Korea
- Grasim Industreis Ltd - India
- The State Trading Corporation of India Ltd
- Mercuria Energy - Indonesia
- Chamber of Mines of South Africa
- Bukit Makmur.PT - Indonesia
- Mintek Dendrill Indonesia
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Aditya Birla Group - India
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Kepco SPC Power Corporation, Philippines
- Vedanta Resources Plc - India
- Cement Manufacturers Association - India
- Vijayanagar Sugar Pvt Ltd - India
- IHS Mccloskey Coal Group - USA
- Gujarat Sidhee Cement - India
- Bhatia International Limited - India
- Port Waratah Coal Services - Australia
- Kumho Petrochemical, South Korea
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- London Commodity Brokers - England
- Indian Energy Exchange, India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Indonesian Coal Mining Association
- Bukit Baiduri Energy - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Africa Commodities Group - South Africa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Aboitiz Power Corporation - Philippines
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Jaiprakash Power Ventures ltd
- Mercator Lines Limited - India
- OPG Power Generation Pvt Ltd - India
- SMG Consultants - Indonesia
- VISA Power Limited - India
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- International Coal Ventures Pvt Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Energy Development Corp, Philippines
- Videocon Industries ltd - India
- Bhushan Steel Limited - India
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ind-Barath Power Infra Limited - India
- South Luzon Thermal Energy Corporation
- The University of Queensland
- CNBM International Corporation - China
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Sree Jayajothi Cements Limited - India
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Meenaskhi Energy Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- ASAPP Information Group - India
- Marubeni Corporation - India
- Carbofer General Trading SA - India
- Orica Mining Services - Indonesia
- McConnell Dowell - Australia
- Renaissance Capital - South Africa
- Parliament of New Zealand
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Petron Corporation, Philippines
- Indian Oil Corporation Limited
- Uttam Galva Steels Limited - India
- European Bulk Services B.V. - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Ministry of Transport, Egypt
- Electricity Generating Authority of Thailand
- Maheswari Brothers Coal Limited - India
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Billiton Holdings Pty Ltd - Australia
- Bangladesh Power Developement Board
- Central Java Power - Indonesia
- Manunggal Multi Energi - Indonesia
- Timah Investasi Mineral - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Economic Council, Georgia
- Indo Tambangraya Megah - Indonesia
- Oldendorff Carriers - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Pendopo Energi Batubara - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Vizag Seaport Private Limited - India
- Thai Mozambique Logistica
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Baramulti Group, Indonesia
- San Jose City I Power Corp, Philippines
- Thiess Contractors Indonesia
- Merrill Lynch Commodities Europe
- Alfred C Toepfer International GmbH - Germany
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- Simpson Spence & Young - Indonesia
- Sakthi Sugars Limited - India
- MS Steel International - UAE
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- Binh Thuan Hamico - Vietnam
- Ministry of Mines - Canada
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- Kalimantan Lumbung Energi - Indonesia
- Kaltim Prima Coal - Indonesia
- IEA Clean Coal Centre - UK
- Sindya Power Generating Company Private Ltd
- Dalmia Cement Bharat India
- PNOC Exploration Corporation - Philippines
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- SMC Global Power, Philippines
- Savvy Resources Ltd - HongKong
- Latin American Coal - Colombia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Anglo American - United Kingdom
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Bahari Cakrawala Sebuku - Indonesia
- Malabar Cements Ltd - India
- Global Green Power PLC Corporation, Philippines
- PTC India Limited - India
- The Treasury - Australian Government
- Banpu Public Company Limited - Thailand
- Chettinad Cement Corporation Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Xindia Steels Limited - India
- Tata Chemicals Ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Standard Chartered Bank - UAE
- GAC Shipping (India) Pvt Ltd
- Bukit Asam (Persero) Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Star Paper Mills Limited - India
- Commonwealth Bank - Australia
- Australian Coal Association
- Rio Tinto Coal - Australia
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Holcim Trading Pte Ltd - Singapore
- Deloitte Consulting - India
- New Zealand Coal & Carbon
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Singapore Mercantile Exchange
- Romanian Commodities Exchange
- Ambuja Cements Ltd - India
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- White Energy Company Limited
- Kohat Cement Company Ltd. - Pakistan
- Agrawal Coal Company - India
- Straits Asia Resources Limited - Singapore
- Antam Resourcindo - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Energy Link Ltd, New Zealand
- Bharathi Cement Corporation - India
- Samtan Co., Ltd - South Korea
- Lanco Infratech Ltd - India
- Bhoruka Overseas - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- Orica Australia Pty. Ltd.
- Minerals Council of Australia
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Altura Mining Limited, Indonesia
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