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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, 05 February 20
CORONAVIRUS AND THE SHIPPING INDUSTRY - WATSON, FARLEY & WILLIAMS
The continued spread of Coronavirus and governmental measures to minimise the impact is likely to affect the shipping industry and supply chain.
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Wednesday, 05 February 20
INDONESIA'S COAL PRICE REFERENCE UP 1.46% IN FEBRUARY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised up the benchmark price of Indonesian thermal co ...
Wednesday, 05 February 20
MARKET INSIGHT - INTERMODAL
The oil and gas industry benefitted from a strong and solid ground in the previous year. We witnessed a slow but steady increase in bunker’s ...
Wednesday, 05 February 20
RUSSIA EXPORTED 28.6 MLN TONNES OF LNG IN 2019 - REFINITIV
A lot of attention has been paid recently on the surge in LNG exports from the United States. However, another country which is seeing truly expone ...
Tuesday, 04 February 20
CAPE: THE AVERAGE EARNINGS PER DAY FELL BENEATH THE USD 4,000, A LEVEL CONSIDERABLY BELOW EVEN THE MOST CONSERVATIVE OPEX LEVELS - ALLIED
The recent slump in the dry bulk freight market may well have been expected to some degree, but despite this the shock was still overwhelming when ...
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- Deloitte Consulting - India
- PTC India Limited - India
- IEA Clean Coal Centre - UK
- Chamber of Mines of South Africa
- Port Waratah Coal Services - Australia
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Coalindo Energy - Indonesia
- Thiess Contractors Indonesia
- Siam City Cement - Thailand
- Baramulti Group, Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Agrawal Coal Company - India
- Bangladesh Power Developement Board
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Meralco Power Generation, Philippines
- Altura Mining Limited, Indonesia
- The University of Queensland
- Minerals Council of Australia
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- Pendopo Energi Batubara - Indonesia
- VISA Power Limited - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Siam City Cement PLC, Thailand
- Rio Tinto Coal - Australia
- Riau Bara Harum - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Aditya Birla Group - India
- New Zealand Coal & Carbon
- Wood Mackenzie - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Jindal Steel & Power Ltd - India
- Iligan Light & Power Inc, Philippines
- Samtan Co., Ltd - South Korea
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- SMG Consultants - Indonesia
- Sree Jayajothi Cements Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Kepco SPC Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Kideco Jaya Agung - Indonesia
- India Bulls Power Limited - India
- Sakthi Sugars Limited - India
- Formosa Plastics Group - Taiwan
- GMR Energy Limited - India
- SMC Global Power, Philippines
- Attock Cement Pakistan Limited
- Energy Development Corp, Philippines
- Sojitz Corporation - Japan
- Commonwealth Bank - Australia
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- CIMB Investment Bank - Malaysia
- Electricity Authority, New Zealand
- Essar Steel Hazira Ltd - India
- Barasentosa Lestari - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Karaikal Port Pvt Ltd - India
- Directorate Of Revenue Intelligence - India
- Rashtriya Ispat Nigam Limited - India
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Electricity Generating Authority of Thailand
- ICICI Bank Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indian Oil Corporation Limited
- Malabar Cements Ltd - India
- MS Steel International - UAE
- Posco Energy - South Korea
- Mercator Lines Limited - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- Xindia Steels Limited - India
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Independent Power Producers Association of India
- Aboitiz Power Corporation - Philippines
- Kalimantan Lumbung Energi - Indonesia
- Central Electricity Authority - India
- Bahari Cakrawala Sebuku - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Makarim & Taira - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Madhucon Powers Ltd - India
- The State Trading Corporation of India Ltd
- Bulk Trading Sa - Switzerland
- The Treasury - Australian Government
- Parry Sugars Refinery, India
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- London Commodity Brokers - England
- San Jose City I Power Corp, Philippines
- Latin American Coal - Colombia
- Ministry of Mines - Canada
- Manunggal Multi Energi - Indonesia
- Parliament of New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- Heidelberg Cement - Germany
- AsiaOL BioFuels Corp., Philippines
- Petron Corporation, Philippines
- Krishnapatnam Port Company Ltd. - India
- GAC Shipping (India) Pvt Ltd
- Jaiprakash Power Ventures ltd
- Bayan Resources Tbk. - Indonesia
- Indonesian Coal Mining Association
- Mjunction Services Limited - India
- Romanian Commodities Exchange
- Tata Chemicals Ltd - India
- Anglo American - United Kingdom
- Economic Council, Georgia
- Mercuria Energy - Indonesia
- Antam Resourcindo - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Kaltim Prima Coal - Indonesia
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Globalindo Alam Lestari - Indonesia
- Australian Coal Association
- Billiton Holdings Pty Ltd - Australia
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Indogreen Group - Indonesia
- European Bulk Services B.V. - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Standard Chartered Bank - UAE
- Georgia Ports Authority, United States
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Indo Tambangraya Megah - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Larsen & Toubro Limited - India
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Bukit Baiduri Energy - Indonesia
- Eastern Coal Council - USA
- Energy Link Ltd, New Zealand
- Gujarat Electricity Regulatory Commission - India
- Orica Australia Pty. Ltd.
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Salva Resources Pvt Ltd - India
- White Energy Company Limited
- Wilmar Investment Holdings
- Timah Investasi Mineral - Indoneisa
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Sidhee Cement - India
- Dalmia Cement Bharat India
- Sical Logistics Limited - India
- Coastal Gujarat Power Limited - India
- Vizag Seaport Private Limited - India
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhushan Steel Limited - India
- Merrill Lynch Commodities Europe
- Interocean Group of Companies - India
- Maharashtra Electricity Regulatory Commission - India
- Alfred C Toepfer International GmbH - Germany
- Ministry of Transport, Egypt
- TNB Fuel Sdn Bhd - Malaysia
- Meenaskhi Energy Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Uttam Galva Steels Limited - India
- Coal and Oil Company - UAE
- Semirara Mining Corp, Philippines
- Metalloyd Limited - United Kingdom
- PNOC Exploration Corporation - Philippines
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Grasim Industreis Ltd - India
- Simpson Spence & Young - Indonesia
- Bukit Makmur.PT - Indonesia
- Videocon Industries ltd - India
- Oldendorff Carriers - Singapore
- Binh Thuan Hamico - Vietnam
- McConnell Dowell - Australia
- Indian Energy Exchange, India
- SN Aboitiz Power Inc, Philippines
- CNBM International Corporation - China
- Savvy Resources Ltd - HongKong
- Chettinad Cement Corporation Ltd - India
- IHS Mccloskey Coal Group - USA
- PowerSource Philippines DevCo
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Mining Services - Indonesia
- Sindya Power Generating Company Private Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Cement Manufacturers Association - India
- Tamil Nadu electricity Board
- Global Coal Blending Company Limited - Australia
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