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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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Tuesday, 11 April 23
OIL RISES ON CHINA STIMULUS EXPECTATIONS, WEAKER DOLLAR - REUTERS
Oil prices rose on Tuesday on expectations of potential economic stimulus by China, healthy demand in the rest of Asia and a drop in U.S. crude sto ...
Sunday, 09 April 23
CHINA’S BUSINESS INCOME REBOUND POINTS TO IMPROVING ECONOMY: OFFICIAL - XINHUA
Chinese businesses have posted a strong rebound in sales revenue since the beginning of this year in the latest signal of an improving economy.
...
Sunday, 09 April 23
COAL INDIA TO BOOST SUPPLIES TO INDUSTRIES AS UTILITIES’ INVENTORIES RISE - REUTERS
Coal India Ltd will increase supplies to industries, the world’s largest coal miner said on Wednesday as fuel inventories at utilities run by ...
Thursday, 06 April 23
MARKET INSIGHT - INTERMODAL
LNG Current Supply/Demand Dynamics
This year, LNG supply will likely exceed demand, so prices will need to decline to levels that will encourag ...
Sunday, 26 March 23
EUROPE’S RUSH TO LNG COULD TURN INTO 'WORLD’S MOST EXPENSIVE AND UNNECESSARY INSURANCE POLICY'- CNBC
Europe’s rapid buildout of liquefied natural gas infrastructure is on track to far exceed demand by the end of the decade, according to new r ...
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- Ind-Barath Power Infra Limited - India
- Kideco Jaya Agung - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- GVK Power & Infra Limited - India
- Iligan Light & Power Inc, Philippines
- Lanco Infratech Ltd - India
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Medco Energi Mining Internasional
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Interocean Group of Companies - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Antam Resourcindo - Indonesia
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Karbindo Abesyapradhi - Indoneisa
- San Jose City I Power Corp, Philippines
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Sakthi Sugars Limited - India
- Thiess Contractors Indonesia
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Aboitiz Power Corporation - Philippines
- ASAPP Information Group - India
- Carbofer General Trading SA - India
- Sinarmas Energy and Mining - Indonesia
- Kumho Petrochemical, South Korea
- Central Java Power - Indonesia
- Energy Link Ltd, New Zealand
- Indika Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- Ministry of Mines - Canada
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Jorong Barutama Greston.PT - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Neyveli Lignite Corporation Ltd, - India
- SMC Global Power, Philippines
- Kapuas Tunggal Persada - Indonesia
- Indo Tambangraya Megah - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Heidelberg Cement - Germany
- Gujarat Electricity Regulatory Commission - India
- Kohat Cement Company Ltd. - Pakistan
- Sindya Power Generating Company Private Ltd
- Vijayanagar Sugar Pvt Ltd - India
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Indonesian Coal Mining Association
- Commonwealth Bank - Australia
- Siam City Cement - Thailand
- Savvy Resources Ltd - HongKong
- The State Trading Corporation of India Ltd
- Parliament of New Zealand
- Uttam Galva Steels Limited - India
- Australian Coal Association
- Economic Council, Georgia
- Straits Asia Resources Limited - Singapore
- Bhushan Steel Limited - India
- MS Steel International - UAE
- Renaissance Capital - South Africa
- CNBM International Corporation - China
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Goldman Sachs - Singapore
- Madhucon Powers Ltd - India
- Standard Chartered Bank - UAE
- European Bulk Services B.V. - Netherlands
- Bhatia International Limited - India
- Petron Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Latin American Coal - Colombia
- Malabar Cements Ltd - India
- Energy Development Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- CIMB Investment Bank - Malaysia
- Central Electricity Authority - India
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Eastern Energy - Thailand
- Metalloyd Limited - United Kingdom
- Ministry of Finance - Indonesia
- Kobexindo Tractors - Indoneisa
- Therma Luzon, Inc, Philippines
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Oldendorff Carriers - Singapore
- Deloitte Consulting - India
- Makarim & Taira - Indonesia
- Orica Mining Services - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Xindia Steels Limited - India
- PowerSource Philippines DevCo
- The Treasury - Australian Government
- ICICI Bank Limited - India
- Singapore Mercantile Exchange
- Formosa Plastics Group - Taiwan
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Agrawal Coal Company - India
- GN Power Mariveles Coal Plant, Philippines
- Power Finance Corporation Ltd., India
- Bangladesh Power Developement Board
- OPG Power Generation Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vedanta Resources Plc - India
- Mercator Lines Limited - India
- Karaikal Port Pvt Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Wood Mackenzie - Singapore
- Kaltim Prima Coal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Edison Trading Spa - Italy
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Ambuja Cements Ltd - India
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- PTC India Limited - India
- Maharashtra Electricity Regulatory Commission - India
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Bank of Tokyo Mitsubishi UFJ Ltd
- Borneo Indobara - Indonesia
- Pendopo Energi Batubara - Indonesia
- Romanian Commodities Exchange
- Indogreen Group - Indonesia
- Mercuria Energy - Indonesia
- Essar Steel Hazira Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- SMG Consultants - Indonesia
- Toyota Tsusho Corporation, Japan
- Kartika Selabumi Mining - Indonesia
- Mintek Dendrill Indonesia
- Samtan Co., Ltd - South Korea
- Sical Logistics Limited - India
- White Energy Company Limited
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coastal Gujarat Power Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Independent Power Producers Association of India
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Simpson Spence & Young - Indonesia
- Bharathi Cement Corporation - India
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Timah Investasi Mineral - Indoneisa
- Banpu Public Company Limited - Thailand
- Manunggal Multi Energi - Indonesia
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- GAC Shipping (India) Pvt Ltd
- Vizag Seaport Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Oil Corporation Limited
- Merrill Lynch Commodities Europe
- Kalimantan Lumbung Energi - Indonesia
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- London Commodity Brokers - England
- Global Coal Blending Company Limited - Australia
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Thai Mozambique Logistica
- Riau Bara Harum - Indonesia
- Bukit Makmur.PT - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- The University of Queensland
- Georgia Ports Authority, United States
- Minerals Council of Australia
- Wilmar Investment Holdings
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
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