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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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Sunday, 26 February 23
MAWANI AND JEDDAH CHAMBER SIGN AN AGREEMENT TO BUILD INTEGRATED LOGISTICS PARK
Press Release: The Saudi Ports Authority (Mawani) and Jeddah Chamber of Commerce and Industry have today inked an agreement to set up an integrated ...
Saturday, 25 February 23
INDONESIA IS STILL BY FAR THE TOP SUPPLIER OF COAL TO CHINA - BANCHERO COSTA
After a slow start in the first quarter, global coal trade has really picked up pace last year, and is now fully back to pre-Covid levels, said ban ...
Wednesday, 22 February 23
MARKET INSIGHT - INTERMODAL
The short-term outlook of the global soybean market is currently pivoted by a combination of weather patterns that are affecting the harvest progre ...
Saturday, 18 February 23
OIL UNLIKELY TO BREAK ABOVE $100/BBL THIS YEAR, J.P.MORGAN SAYS –- REUTERS
Brent oil prices are unlikely to breach the $100 a barrel level this year, barring any significant geopolitical drivers, with OPEC+ potentially add ...
Saturday, 18 February 23
CHINA'S COAL PRICES FALL TO 1 YR-LOW, CLOUDING DEMAND AND IMPORT OUTLOOK - REUTERS
China’s thermal coal prices hit their lowest levels in a year this week on rising inventories as domestic mine production is recovering faste ...
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- Carbofer General Trading SA - India
- Uttam Galva Steels Limited - India
- Coalindo Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Altura Mining Limited, Indonesia
- OPG Power Generation Pvt Ltd - India
- Australian Commodity Traders Exchange
- Bhatia International Limited - India
- Sojitz Corporation - Japan
- Chamber of Mines of South Africa
- SMC Global Power, Philippines
- Marubeni Corporation - India
- Rio Tinto Coal - Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Meralco Power Generation, Philippines
- Tamil Nadu electricity Board
- Neyveli Lignite Corporation Ltd, - India
- Cement Manufacturers Association - India
- Georgia Ports Authority, United States
- Goldman Sachs - Singapore
- Xindia Steels Limited - India
- Makarim & Taira - Indonesia
- Ministry of Mines - Canada
- Ceylon Electricity Board - Sri Lanka
- Renaissance Capital - South Africa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Banpu Public Company Limited - Thailand
- The State Trading Corporation of India Ltd
- PTC India Limited - India
- Madhucon Powers Ltd - India
- New Zealand Coal & Carbon
- Indian Oil Corporation Limited
- Deloitte Consulting - India
- SMG Consultants - Indonesia
- White Energy Company Limited
- Bharathi Cement Corporation - India
- Malabar Cements Ltd - India
- CNBM International Corporation - China
- Directorate Of Revenue Intelligence - India
- Sindya Power Generating Company Private Ltd
- Petrochimia International Co. Ltd.- Taiwan
- Kaltim Prima Coal - Indonesia
- Mercator Lines Limited - India
- International Coal Ventures Pvt Ltd - India
- Tata Chemicals Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Orica Mining Services - Indonesia
- Mintek Dendrill Indonesia
- Iligan Light & Power Inc, Philippines
- Edison Trading Spa - Italy
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Wilmar Investment Holdings
- Coal and Oil Company - UAE
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- AsiaOL BioFuels Corp., Philippines
- Simpson Spence & Young - Indonesia
- Petron Corporation, Philippines
- Sarangani Energy Corporation, Philippines
- London Commodity Brokers - England
- Electricity Authority, New Zealand
- Wood Mackenzie - Singapore
- Jaiprakash Power Ventures ltd
- Holcim Trading Pte Ltd - Singapore
- Ambuja Cements Ltd - India
- Australian Coal Association
- Trasteel International SA, Italy
- Jorong Barutama Greston.PT - Indonesia
- Singapore Mercantile Exchange
- Global Business Power Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Mjunction Services Limited - India
- McConnell Dowell - Australia
- Timah Investasi Mineral - Indoneisa
- Videocon Industries ltd - India
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- San Jose City I Power Corp, Philippines
- Orica Australia Pty. Ltd.
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Kepco SPC Power Corporation, Philippines
- Central Java Power - Indonesia
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Interocean Group of Companies - India
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- LBH Netherlands Bv - Netherlands
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- IHS Mccloskey Coal Group - USA
- Eastern Energy - Thailand
- Bulk Trading Sa - Switzerland
- Globalindo Alam Lestari - Indonesia
- Economic Council, Georgia
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Indogreen Group - Indonesia
- India Bulls Power Limited - India
- ASAPP Information Group - India
- Kumho Petrochemical, South Korea
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- GAC Shipping (India) Pvt Ltd
- Kideco Jaya Agung - Indonesia
- Oldendorff Carriers - Singapore
- Toyota Tsusho Corporation, Japan
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Pendopo Energi Batubara - Indonesia
- Vizag Seaport Private Limited - India
- Standard Chartered Bank - UAE
- Planning Commission, India
- Binh Thuan Hamico - Vietnam
- Siam City Cement - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Electricity Generating Authority of Thailand
- Antam Resourcindo - Indonesia
- Central Electricity Authority - India
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- Independent Power Producers Association of India
- Mercuria Energy - Indonesia
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Gujarat Mineral Development Corp Ltd - India
- Global Coal Blending Company Limited - Australia
- Kapuas Tunggal Persada - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Siam City Cement PLC, Thailand
- Straits Asia Resources Limited - Singapore
- Lanco Infratech Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Gujarat Sidhee Cement - India
- Indian Energy Exchange, India
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- GMR Energy Limited - India
- Ministry of Finance - Indonesia
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Bukit Makmur.PT - Indonesia
- Maheswari Brothers Coal Limited - India
- Medco Energi Mining Internasional
- South Luzon Thermal Energy Corporation
- Coastal Gujarat Power Limited - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Agrawal Coal Company - India
- Krishnapatnam Port Company Ltd. - India
- Bukit Baiduri Energy - Indonesia
- Parry Sugars Refinery, India
- Kobexindo Tractors - Indoneisa
- Borneo Indobara - Indonesia
- MS Steel International - UAE
- Dalmia Cement Bharat India
- Riau Bara Harum - Indonesia
- CIMB Investment Bank - Malaysia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Meenaskhi Energy Private Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Star Paper Mills Limited - India
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- European Bulk Services B.V. - Netherlands
- Larsen & Toubro Limited - India
- Semirara Mining and Power Corporation, Philippines
- Rashtriya Ispat Nigam Limited - India
- PowerSource Philippines DevCo
- Parliament of New Zealand
- GN Power Mariveles Coal Plant, Philippines
- Cigading International Bulk Terminal - Indonesia
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- Africa Commodities Group - South Africa
- VISA Power Limited - India
- Barasentosa Lestari - Indonesia
- TeaM Sual Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- The University of Queensland
- Metalloyd Limited - United Kingdom
- Ind-Barath Power Infra Limited - India
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