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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, 01 May 20
LUKOIL SHARES LUBRICANT EXPERIENCE AFTER FIRST 100 DAYS OF OPERATION ON VLSFO
KNOWLEDGE TO ELEVATE
After 100 days of VLSFO operation, LUKOIL Marine Lubricants is sharing recent experience on VLSFO operation with NAVIGO M ...
Wednesday, 29 April 20
OIL CLOSES IN ON PEAK OVERSUPPLY - WOOD MACKENZIE
Are we now deep in the abyss? Up to our necks in it, if the oil price is any guide. Brent has now tested sub-US$20/bbl in this downturn and WTI sub ...
Monday, 27 April 20
INCIDENT INVESTIGATION: SEARCH FOR THE CAUSE, NOT THE VILLAIN - GARD
Incident investigations often conclude with placing the blame for an incident on the crew. Causes of the incidents are usually identified as proced ...
Monday, 27 April 20
A 58,000DWT VESSEL WAS FIXED DELIVERY SINGAPORE TRIP VIA INDONESIA, RE-DELIVERY WC INDIA, AT $4,500 - BALTIC BRIEFING
Capesize
The tide turned this week for the Capesize market, as voyage rates registered dramatically falling fuel costs. This was led primarily ...
Sunday, 26 April 20
STRONGER BUNKER PRICES FAIL TO RALLY FREIGHT MARKET - FIS
VLSFO bunker prices rebounded by $22.50 to $229/mt in the port of Singapore but failed to turn around the spot freight market.
Some ...
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- Chamber of Mines of South Africa
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Semirara Mining Corp, Philippines
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- The Treasury - Australian Government
- VISA Power Limited - India
- Gujarat Sidhee Cement - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Interocean Group of Companies - India
- Tata Chemicals Ltd - India
- Intertek Mineral Services - Indonesia
- Latin American Coal - Colombia
- Sree Jayajothi Cements Limited - India
- Asmin Koalindo Tuhup - Indonesia
- McConnell Dowell - Australia
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bangladesh Power Developement Board
- Indika Energy - Indonesia
- ICICI Bank Limited - India
- Wilmar Investment Holdings
- Jorong Barutama Greston.PT - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- White Energy Company Limited
- Kepco SPC Power Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Directorate General of MIneral and Coal - Indonesia
- Bukit Baiduri Energy - Indonesia
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Mercator Lines Limited - India
- Pendopo Energi Batubara - Indonesia
- Kartika Selabumi Mining - Indonesia
- Parry Sugars Refinery, India
- Chettinad Cement Corporation Ltd - India
- Africa Commodities Group - South Africa
- Commonwealth Bank - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Sical Logistics Limited - India
- Vedanta Resources Plc - India
- Savvy Resources Ltd - HongKong
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- London Commodity Brokers - England
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Antam Resourcindo - Indonesia
- Malabar Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- GAC Shipping (India) Pvt Ltd
- Ceylon Electricity Board - Sri Lanka
- Goldman Sachs - Singapore
- PowerSource Philippines DevCo
- Kobexindo Tractors - Indoneisa
- Electricity Generating Authority of Thailand
- Bhoruka Overseas - Indonesia
- Uttam Galva Steels Limited - India
- Petron Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Aditya Birla Group - India
- Planning Commission, India
- International Coal Ventures Pvt Ltd - India
- Kideco Jaya Agung - Indonesia
- Australian Coal Association
- Bulk Trading Sa - Switzerland
- Independent Power Producers Association of India
- Orica Australia Pty. Ltd.
- Kapuas Tunggal Persada - Indonesia
- GVK Power & Infra Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Larsen & Toubro Limited - India
- Banpu Public Company Limited - Thailand
- Eastern Energy - Thailand
- Parliament of New Zealand
- Renaissance Capital - South Africa
- Price Waterhouse Coopers - Russia
- Timah Investasi Mineral - Indoneisa
- Gujarat Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Meenaskhi Energy Private Limited - India
- Carbofer General Trading SA - India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Global Coal Blending Company Limited - Australia
- Indogreen Group - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
- Deloitte Consulting - India
- Minerals Council of Australia
- Aboitiz Power Corporation - Philippines
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bharathi Cement Corporation - India
- Electricity Authority, New Zealand
- Salva Resources Pvt Ltd - India
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Maheswari Brothers Coal Limited - India
- Economic Council, Georgia
- Ministry of Transport, Egypt
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Ministry of Mines - Canada
- PNOC Exploration Corporation - Philippines
- Leighton Contractors Pty Ltd - Australia
- Xindia Steels Limited - India
- Siam City Cement PLC, Thailand
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- GMR Energy Limited - India
- Energy Link Ltd, New Zealand
- Essar Steel Hazira Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Central Electricity Authority - India
- Star Paper Mills Limited - India
- ASAPP Information Group - India
- Bayan Resources Tbk. - Indonesia
- Dalmia Cement Bharat India
- Coalindo Energy - Indonesia
- CIMB Investment Bank - Malaysia
- The University of Queensland
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Neyveli Lignite Corporation Ltd, - India
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Bukit Makmur.PT - Indonesia
- Borneo Indobara - Indonesia
- San Jose City I Power Corp, Philippines
- Power Finance Corporation Ltd., India
- Cement Manufacturers Association - India
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Grasim Industreis Ltd - India
- Indian Oil Corporation Limited
- Mintek Dendrill Indonesia
- Sojitz Corporation - Japan
- Binh Thuan Hamico - Vietnam
- India Bulls Power Limited - India
- Holcim Trading Pte Ltd - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Thiess Contractors Indonesia
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- Mercuria Energy - Indonesia
- Bhatia International Limited - India
- Anglo American - United Kingdom
- Krishnapatnam Port Company Ltd. - India
- MS Steel International - UAE
- Maharashtra Electricity Regulatory Commission - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Vizag Seaport Private Limited - India
- Mjunction Services Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- PTC India Limited - India
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Lanco Infratech Ltd - India
- Formosa Plastics Group - Taiwan
- TNB Fuel Sdn Bhd - Malaysia
- Attock Cement Pakistan Limited
- Kalimantan Lumbung Energi - Indonesia
- Toyota Tsusho Corporation, Japan
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Altura Mining Limited, Indonesia
- Gujarat Mineral Development Corp Ltd - India
- SMC Global Power, Philippines
- Sarangani Energy Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Baramulti Group, Indonesia
- Posco Energy - South Korea
- Straits Asia Resources Limited - Singapore
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Trasteel International SA, Italy
- Coal and Oil Company - UAE
- Energy Development Corp, Philippines
- IEA Clean Coal Centre - UK
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Samtan Co., Ltd - South Korea
- Manunggal Multi Energi - Indonesia
- Iligan Light & Power Inc, Philippines
- Barasentosa Lestari - Indonesia
- Medco Energi Mining Internasional
- Sinarmas Energy and Mining - Indonesia
- Singapore Mercantile Exchange
- SMG Consultants - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
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