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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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Saturday, 30 November 19
PANAMAX: LEVELS IMPROVED IN THE PACIFIC MARKET TOO WITH $11,000 BEING CONCLUDED ON AN 81,000DWT SHIP FOR AN INDONESIA TO CHINA COAL TRIP - BALTIC BRIEFING
Capesize
The market has been well supported over the past week, led primarily by the Atlantic Basin. After bottoming last week, sentiment was s ...
Friday, 29 November 19
FITCHRATINGS MAINTAINS NEGATIVE 2020 OUTLOOK ON SHIPPING, AS TIGHTER SUPPLY HELPS, BUT SOFTER DEMAND DRAGS
Fitch’s Sector Outlook: Negative
We maintain a negative sector outlook for global shipping because of the forecast slowdown of ...
Friday, 29 November 19
INDONESIA PRODUCES 390 MLN TONNES OF COAL IN JAN-SEPT: MINISTER - REUTERS
Indonesia’s production of coal for the January-September period was 390 million tonnes, Energy and Mineral Resources Minister Arifin Tasrif s ...
Wednesday, 27 November 19
SHIPPING MARKET INSIGHT - INTERMODAL
As the end of the fourth quarter is approaching, one could say that the wet market has maintained the strong pace observed during the third qu ...
Tuesday, 26 November 19
PREPARATIONS INTENSIFY AS 1 JANUARY 2020 GLOBAL CUT IN SULPHUR IN SHIP'S FUEL OIL LOOMS: IMO
“IMO 2020” requirements for ships to cut sulphur oxide emissions enter into effect in just over one month’s time. This will signi ...
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- Mintek Dendrill Indonesia
- South Luzon Thermal Energy Corporation
- Global Green Power PLC Corporation, Philippines
- Eastern Coal Council - USA
- Indo Tambangraya Megah - Indonesia
- Altura Mining Limited, Indonesia
- GVK Power & Infra Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Commonwealth Bank - Australia
- Indika Energy - Indonesia
- VISA Power Limited - India
- Savvy Resources Ltd - HongKong
- PNOC Exploration Corporation - Philippines
- Ministry of Mines - Canada
- Billiton Holdings Pty Ltd - Australia
- Meralco Power Generation, Philippines
- Madhucon Powers Ltd - India
- European Bulk Services B.V. - Netherlands
- Malabar Cements Ltd - India
- Bharathi Cement Corporation - India
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Interocean Group of Companies - India
- Sojitz Corporation - Japan
- ICICI Bank Limited - India
- Bayan Resources Tbk. - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Maheswari Brothers Coal Limited - India
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Vedanta Resources Plc - India
- Planning Commission, India
- McConnell Dowell - Australia
- Samtan Co., Ltd - South Korea
- Energy Link Ltd, New Zealand
- Iligan Light & Power Inc, Philippines
- Sical Logistics Limited - India
- Gujarat Electricity Regulatory Commission - India
- Aboitiz Power Corporation - Philippines
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Medco Energi Mining Internasional
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Indian Oil Corporation Limited
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Bangladesh Power Developement Board
- Indonesian Coal Mining Association
- Makarim & Taira - Indonesia
- Coal and Oil Company - UAE
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Indogreen Group - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Globalindo Alam Lestari - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Riau Bara Harum - Indonesia
- Economic Council, Georgia
- Bhoruka Overseas - Indonesia
- ASAPP Information Group - India
- Pendopo Energi Batubara - Indonesia
- The University of Queensland
- GAC Shipping (India) Pvt Ltd
- Merrill Lynch Commodities Europe
- Heidelberg Cement - Germany
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Sinarmas Energy and Mining - Indonesia
- Renaissance Capital - South Africa
- Kalimantan Lumbung Energi - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Global Coal Blending Company Limited - Australia
- Power Finance Corporation Ltd., India
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Wilmar Investment Holdings
- Dalmia Cement Bharat India
- Agrawal Coal Company - India
- Singapore Mercantile Exchange
- Jindal Steel & Power Ltd - India
- Minerals Council of Australia
- Chamber of Mines of South Africa
- Siam City Cement PLC, Thailand
- Borneo Indobara - Indonesia
- Kepco SPC Power Corporation, Philippines
- Global Business Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Semirara Mining Corp, Philippines
- Ministry of Transport, Egypt
- Georgia Ports Authority, United States
- Gujarat Mineral Development Corp Ltd - India
- Africa Commodities Group - South Africa
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Energy Development Corp, Philippines
- Grasim Industreis Ltd - India
- Edison Trading Spa - Italy
- Deloitte Consulting - India
- Trasteel International SA, Italy
- Mercuria Energy - Indonesia
- Rio Tinto Coal - Australia
- White Energy Company Limited
- Price Waterhouse Coopers - Russia
- Uttam Galva Steels Limited - India
- Bukit Baiduri Energy - Indonesia
- Carbofer General Trading SA - India
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- PTC India Limited - India
- Xindia Steels Limited - India
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- London Commodity Brokers - England
- SMG Consultants - Indonesia
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Antam Resourcindo - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Kaltim Prima Coal - Indonesia
- Posco Energy - South Korea
- Simpson Spence & Young - Indonesia
- SMC Global Power, Philippines
- Toyota Tsusho Corporation, Japan
- Larsen & Toubro Limited - India
- Coalindo Energy - Indonesia
- Kobexindo Tractors - Indoneisa
- Kideco Jaya Agung - Indonesia
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- SN Aboitiz Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Parliament of New Zealand
- New Zealand Coal & Carbon
- Aditya Birla Group - India
- Cement Manufacturers Association - India
- Goldman Sachs - Singapore
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Chettinad Cement Corporation Ltd - India
- Port Waratah Coal Services - Australia
- Standard Chartered Bank - UAE
- Anglo American - United Kingdom
- Petrochimia International Co. Ltd.- Taiwan
- TeaM Sual Corporation - Philippines
- Attock Cement Pakistan Limited
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- International Coal Ventures Pvt Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Electricity Generating Authority of Thailand
- Coastal Gujarat Power Limited - India
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Indian Energy Exchange, India
- Semirara Mining and Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Orica Mining Services - Indonesia
- Directorate Of Revenue Intelligence - India
- Siam City Cement - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Banpu Public Company Limited - Thailand
- Mjunction Services Limited - India
- San Jose City I Power Corp, Philippines
- PowerSource Philippines DevCo
- Kohat Cement Company Ltd. - Pakistan
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Lanco Infratech Ltd - India
- Tamil Nadu electricity Board
- Petron Corporation, Philippines
- Ministry of Finance - Indonesia
- Tata Chemicals Ltd - India
- Central Java Power - Indonesia
- Eastern Energy - Thailand
- Pipit Mutiara Jaya. PT, Indonesia
- Vizag Seaport Private Limited - India
- Australian Commodity Traders Exchange
- Holcim Trading Pte Ltd - Singapore
- IEA Clean Coal Centre - UK
- Sree Jayajothi Cements Limited - India
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Alfred C Toepfer International GmbH - Germany
- Australian Coal Association
- Intertek Mineral Services - Indonesia
- India Bulls Power Limited - India
- Essar Steel Hazira Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Gujarat Sidhee Cement - India
- Meenaskhi Energy Private Limited - India
- Bukit Makmur.PT - Indonesia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- CNBM International Corporation - China
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