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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, 06 May 20
COST CHALLENGES IN A US$20/BBL WORLD - WOOD MACKENZIE
A new approach is needed to ensure supply sector resilience
How will US$20/bbl affect the oil and gas supply chain?
It’s going to g ...
Wednesday, 06 May 20
MARKET INSIGHT - INTERMODAL
It comes as no surprise that activity in the dry bulk SnP market remains soft, with asset values caught in the downward spiral generated by the Cov ...
Wednesday, 06 May 20
FLOATING STORAGE OF OIL CARGOES - STANDARD CLUB
KNOWLEDGE TO ELEVATE
Due to a combination of circumstances there is now a worldwide shortage of storage space ashore for both unrefi ...
Wednesday, 06 May 20
IRON ORE TRADE REMAINS REMARKABLY RESILIENT THIS YEAR, AT LEAST IN ASIA - BANCHERO COSTA
Iron ore trade remains remarkably resilient this year, at least in Asia, despite the global economic impact from COVID-19. In the first 4 months of ...
Tuesday, 05 May 20
SUPRAMAXES: YTD SLIDE HAS BEEN 45%, WITH THE AVERAGE FOR 2020 TCA HOLDING AT US$5,793 - ALLIED
It has been almost three months since the WHO officially categorized the current coronavirus outbreak as a global pandemic, an outbreak that has br ...
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- Bukit Asam (Persero) Tbk - Indonesia
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Ministry of Mines - Canada
- SN Aboitiz Power Inc, Philippines
- Kumho Petrochemical, South Korea
- Sical Logistics Limited - India
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- ICICI Bank Limited - India
- MS Steel International - UAE
- IHS Mccloskey Coal Group - USA
- Pendopo Energi Batubara - Indonesia
- Petron Corporation, Philippines
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Vedanta Resources Plc - India
- Deloitte Consulting - India
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Therma Luzon, Inc, Philippines
- Attock Cement Pakistan Limited
- Neyveli Lignite Corporation Ltd, - India
- Straits Asia Resources Limited - Singapore
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Central Java Power - Indonesia
- Xindia Steels Limited - India
- Leighton Contractors Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Holcim Trading Pte Ltd - Singapore
- Madhucon Powers Ltd - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Indo Tambangraya Megah - Indonesia
- TeaM Sual Corporation - Philippines
- LBH Netherlands Bv - Netherlands
- Salva Resources Pvt Ltd - India
- GVK Power & Infra Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Dalmia Cement Bharat India
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- The State Trading Corporation of India Ltd
- Meralco Power Generation, Philippines
- Kobexindo Tractors - Indoneisa
- Miang Besar Coal Terminal - Indonesia
- Siam City Cement PLC, Thailand
- Antam Resourcindo - Indonesia
- Bulk Trading Sa - Switzerland
- Indika Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Videocon Industries ltd - India
- Bukit Baiduri Energy - Indonesia
- Oldendorff Carriers - Singapore
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Ambuja Cements Ltd - India
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Global Coal Blending Company Limited - Australia
- Bayan Resources Tbk. - Indonesia
- Vizag Seaport Private Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Maheswari Brothers Coal Limited - India
- Orica Mining Services - Indonesia
- Aboitiz Power Corporation - Philippines
- Toyota Tsusho Corporation, Japan
- Manunggal Multi Energi - Indonesia
- Mercuria Energy - Indonesia
- Planning Commission, India
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Directorate Of Revenue Intelligence - India
- Medco Energi Mining Internasional
- Banpu Public Company Limited - Thailand
- Carbofer General Trading SA - India
- Kaltim Prima Coal - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- PowerSource Philippines DevCo
- Economic Council, Georgia
- SMC Global Power, Philippines
- Australian Coal Association
- Latin American Coal - Colombia
- Indian Energy Exchange, India
- PNOC Exploration Corporation - Philippines
- Interocean Group of Companies - India
- Thiess Contractors Indonesia
- Iligan Light & Power Inc, Philippines
- GMR Energy Limited - India
- Ceylon Electricity Board - Sri Lanka
- Gujarat Sidhee Cement - India
- Savvy Resources Ltd - HongKong
- PetroVietnam Power Coal Import and Supply Company
- Bhushan Steel Limited - India
- Price Waterhouse Coopers - Russia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Billiton Holdings Pty Ltd - Australia
- Directorate General of MIneral and Coal - Indonesia
- IEA Clean Coal Centre - UK
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Trasteel International SA, Italy
- Semirara Mining Corp, Philippines
- Australian Commodity Traders Exchange
- Borneo Indobara - Indonesia
- Cement Manufacturers Association - India
- Independent Power Producers Association of India
- Coastal Gujarat Power Limited - India
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- Sree Jayajothi Cements Limited - India
- Sindya Power Generating Company Private Ltd
- Aditya Birla Group - India
- CNBM International Corporation - China
- Kideco Jaya Agung - Indonesia
- Tata Chemicals Ltd - India
- Makarim & Taira - Indonesia
- Electricity Authority, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- San Jose City I Power Corp, Philippines
- Krishnapatnam Port Company Ltd. - India
- Timah Investasi Mineral - Indoneisa
- Thai Mozambique Logistica
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Asmin Koalindo Tuhup - Indonesia
- Globalindo Alam Lestari - Indonesia
- SMG Consultants - Indonesia
- Karaikal Port Pvt Ltd - India
- Global Green Power PLC Corporation, Philippines
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- GAC Shipping (India) Pvt Ltd
- TNB Fuel Sdn Bhd - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Eastern Coal Council - USA
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Semirara Mining and Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Coalindo Energy - Indonesia
- Metalloyd Limited - United Kingdom
- Simpson Spence & Young - Indonesia
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Mjunction Services Limited - India
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Wilmar Investment Holdings
- Edison Trading Spa - Italy
- Gujarat Electricity Regulatory Commission - India
- Sakthi Sugars Limited - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement - Thailand
- Sarangani Energy Corporation, Philippines
- Agrawal Coal Company - India
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Ministry of Transport, Egypt
- Marubeni Corporation - India
- Sinarmas Energy and Mining - Indonesia
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indian Oil Corporation Limited
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Larsen & Toubro Limited - India
- Tamil Nadu electricity Board
- Africa Commodities Group - South Africa
- Indonesian Coal Mining Association
- Bhoruka Overseas - Indonesia
- The University of Queensland
- PTC India Limited - India
- Malabar Cements Ltd - India
- Romanian Commodities Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Energy Link Ltd, New Zealand
- Orica Australia Pty. Ltd.
- Mintek Dendrill Indonesia
- Renaissance Capital - South Africa
- Meenaskhi Energy Private Limited - India
- Intertek Mineral Services - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Global Business Power Corporation, Philippines
- Binh Thuan Hamico - Vietnam
- Kepco SPC Power Corporation, Philippines
- Eastern Energy - Thailand
- Chamber of Mines of South Africa
- Goldman Sachs - Singapore
- Georgia Ports Authority, United States
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