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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, 25 March 20
MARKET INSIGHT - INTERMODAL
There is no doubt that the Covid-19 pandemic crisis is a world-shattering event that will change the world as we know it. Societies are facing chal ...
Wednesday, 25 March 20
INDONESIA TO CANCEL RULES REQUIRING DOMESTIC SHIPS FOR COAL, PALM EXPORTS : REFINITIV
Indonesia's government will revoke rules requiring exporters of coal and palm oil to use domestic shipping companies for shipments, Coordinatin ...
Wednesday, 25 March 20
JAN-FEB 2020, INDONESIA SHIPPED 64.5 MLN TONNES OF COAL, UP +3.4% YOY - BANCHERO COSTA
In the 12 months of calendar 2019, Indonesia exported 386.4 mln tonnes of coal, according to vessel tracking data from Refinitiv. This represents a ...
Tuesday, 24 March 20
MARKET ANALYSIS - ALLIED
As countries around the world struggle to take back control of the ongoing COVID-19 pandemic the global economy shuts down bit by bit, leaving only ...
Tuesday, 24 March 20
THE TRIPLE SHOCK OF CORONAVIRUS IN SHIPPING: WILL IT LAST? - DREWRY
Transport capacity shortages, disruptions to supply chains and inability to plan since late January have been a dangerous combination. But will all ...
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- Bank of Tokyo Mitsubishi UFJ Ltd
- Holcim Trading Pte Ltd - Singapore
- Bukit Makmur.PT - Indonesia
- Savvy Resources Ltd - HongKong
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Chettinad Cement Corporation Ltd - India
- Jindal Steel & Power Ltd - India
- Tata Chemicals Ltd - India
- International Coal Ventures Pvt Ltd - India
- Ministry of Mines - Canada
- McConnell Dowell - Australia
- Ind-Barath Power Infra Limited - India
- Star Paper Mills Limited - India
- Karbindo Abesyapradhi - Indoneisa
- London Commodity Brokers - England
- Simpson Spence & Young - Indonesia
- Interocean Group of Companies - India
- Economic Council, Georgia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Electricity Generating Authority of Thailand
- Sinarmas Energy and Mining - Indonesia
- Larsen & Toubro Limited - India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- San Jose City I Power Corp, Philippines
- Mintek Dendrill Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Leighton Contractors Pty Ltd - Australia
- Aditya Birla Group - India
- Planning Commission, India
- Pendopo Energi Batubara - Indonesia
- Medco Energi Mining Internasional
- Gujarat Sidhee Cement - India
- Bharathi Cement Corporation - India
- Dalmia Cement Bharat India
- TeaM Sual Corporation - Philippines
- Independent Power Producers Association of India
- Australian Commodity Traders Exchange
- Electricity Authority, New Zealand
- Toyota Tsusho Corporation, Japan
- Indian Energy Exchange, India
- Kartika Selabumi Mining - Indonesia
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Africa Commodities Group - South Africa
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Baramulti Group, Indonesia
- Renaissance Capital - South Africa
- Eastern Energy - Thailand
- Goldman Sachs - Singapore
- Grasim Industreis Ltd - India
- Antam Resourcindo - Indonesia
- PowerSource Philippines DevCo
- SN Aboitiz Power Inc, Philippines
- Ministry of Transport, Egypt
- The Treasury - Australian Government
- Petron Corporation, Philippines
- Sical Logistics Limited - India
- Metalloyd Limited - United Kingdom
- Siam City Cement PLC, Thailand
- Oldendorff Carriers - Singapore
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Romanian Commodities Exchange
- Deloitte Consulting - India
- Salva Resources Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Manunggal Multi Energi - Indonesia
- Vizag Seaport Private Limited - India
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Cement Manufacturers Association - India
- Kepco SPC Power Corporation, Philippines
- Videocon Industries ltd - India
- Timah Investasi Mineral - Indoneisa
- Asmin Koalindo Tuhup - Indonesia
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Essar Steel Hazira Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Tamil Nadu electricity Board
- Bhatia International Limited - India
- Merrill Lynch Commodities Europe
- SMC Global Power, Philippines
- The University of Queensland
- ASAPP Information Group - India
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Latin American Coal - Colombia
- CIMB Investment Bank - Malaysia
- Sojitz Corporation - Japan
- Formosa Plastics Group - Taiwan
- Global Coal Blending Company Limited - Australia
- Cigading International Bulk Terminal - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- GMR Energy Limited - India
- VISA Power Limited - India
- Indian Oil Corporation Limited
- Wilmar Investment Holdings
- IEA Clean Coal Centre - UK
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- SMG Consultants - Indonesia
- Madhucon Powers Ltd - India
- Miang Besar Coal Terminal - Indonesia
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ceylon Electricity Board - Sri Lanka
- Trasteel International SA, Italy
- Thiess Contractors Indonesia
- Power Finance Corporation Ltd., India
- Price Waterhouse Coopers - Russia
- Gujarat Mineral Development Corp Ltd - India
- Kideco Jaya Agung - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Posco Energy - South Korea
- Sree Jayajothi Cements Limited - India
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- Semirara Mining Corp, Philippines
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Kaltim Prima Coal - Indonesia
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Altura Mining Limited, Indonesia
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Marubeni Corporation - India
- Bangladesh Power Developement Board
- Straits Asia Resources Limited - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Chamber of Mines of South Africa
- PTC India Limited - India
- Carbofer General Trading SA - India
- Indogreen Group - Indonesia
- Sarangani Energy Corporation, Philippines
- Australian Coal Association
- Anglo American - United Kingdom
- Kumho Petrochemical, South Korea
- Alfred C Toepfer International GmbH - Germany
- Agrawal Coal Company - India
- Parliament of New Zealand
- Coal and Oil Company - UAE
- OPG Power Generation Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Commonwealth Bank - Australia
- Coastal Gujarat Power Limited - India
- Ministry of Finance - Indonesia
- The State Trading Corporation of India Ltd
- MS Steel International - UAE
- Central Java Power - Indonesia
- Siam City Cement - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kobexindo Tractors - Indoneisa
- GVK Power & Infra Limited - India
- Xindia Steels Limited - India
- Rashtriya Ispat Nigam Limited - India
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Lanco Infratech Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- GAC Shipping (India) Pvt Ltd
- Orica Australia Pty. Ltd.
- LBH Netherlands Bv - Netherlands
- Bhushan Steel Limited - India
- Indika Energy - Indonesia
- Bulk Trading Sa - Switzerland
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Orica Mining Services - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Edison Trading Spa - Italy
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- ICICI Bank Limited - India
- Energy Link Ltd, New Zealand
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Maheswari Brothers Coal Limited - India
- Maharashtra Electricity Regulatory Commission - India
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