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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, 13 February 19
SHIPPING MARKET INSIGHT - INTERMODAL
If there is one word that can describe the current shipping environment then that this word is most probably “volatility.” The sentimen ...
Saturday, 09 February 19
SUPRAMAX: A 63,000-TONNER WAS REPORTED FIXED DELIVERY FOR AN EAST KALIMANTAN TRIP, REDELIVERY WEST COAST INDIA, AT $9,250 - THE BALTIC BRIEFING
Cape
The Vale disaster weighed heavily on the market for big ships, with uncertainty about shipments/future exports leading to a sharp drop in ...
Friday, 08 February 19
LOWER-QUALITY INDONESIA EXPORTS ROSE 39 MT IN 2018 YOY PRIMARILY IN RESPONSE TO INCREASED DEMAND FROM CHINA AND INDIA - PEABODY
"Underlying seaborne met and thermal coal conditions remain quite positive and the pace of U.S. coal-fueled power plant retirements is expecte ...
Thursday, 07 February 19
QATAR CAN GAIN FROM DECLINING COAL - THE PENINSULA
With North America and Europe closing down their old coal and nuclear plants, major gas exporters like Qatar can and should gain market share. With ...
Wednesday, 06 February 19
FEBRUARY 2019 INDONESIA'S COAL REFERENCE PRICE FELL 8.83 PERCENT YOY
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down again the benchmark price of Indonesian th ...
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- Merrill Lynch Commodities Europe
- Neyveli Lignite Corporation Ltd, - India
- GMR Energy Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Meenaskhi Energy Private Limited - India
- Baramulti Group, Indonesia
- Uttam Galva Steels Limited - India
- CNBM International Corporation - China
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- New Zealand Coal & Carbon
- European Bulk Services B.V. - Netherlands
- Borneo Indobara - Indonesia
- Bayan Resources Tbk. - Indonesia
- PowerSource Philippines DevCo
- TNB Fuel Sdn Bhd - Malaysia
- London Commodity Brokers - England
- Central Java Power - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Australian Coal Association
- Petron Corporation, Philippines
- Orica Australia Pty. Ltd.
- Siam City Cement - Thailand
- Tata Chemicals Ltd - India
- Aboitiz Power Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- The University of Queensland
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- IEA Clean Coal Centre - UK
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- Mintek Dendrill Indonesia
- Dalmia Cement Bharat India
- Pendopo Energi Batubara - Indonesia
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Siam City Cement PLC, Thailand
- Jindal Steel & Power Ltd - India
- The State Trading Corporation of India Ltd
- Indian Oil Corporation Limited
- Semirara Mining Corp, Philippines
- Rashtriya Ispat Nigam Limited - India
- Rio Tinto Coal - Australia
- Sojitz Corporation - Japan
- Krishnapatnam Port Company Ltd. - India
- Binh Thuan Hamico - Vietnam
- SN Aboitiz Power Inc, Philippines
- Agrawal Coal Company - India
- Georgia Ports Authority, United States
- Larsen & Toubro Limited - India
- Heidelberg Cement - Germany
- Indika Energy - Indonesia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Kaltim Prima Coal - Indonesia
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Price Waterhouse Coopers - Russia
- MS Steel International - UAE
- Star Paper Mills Limited - India
- Therma Luzon, Inc, Philippines
- Sinarmas Energy and Mining - Indonesia
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Medco Energi Mining Internasional
- Goldman Sachs - Singapore
- Vizag Seaport Private Limited - India
- Latin American Coal - Colombia
- Kohat Cement Company Ltd. - Pakistan
- Salva Resources Pvt Ltd - India
- Vedanta Resources Plc - India
- ASAPP Information Group - India
- White Energy Company Limited
- Kobexindo Tractors - Indoneisa
- Eastern Energy - Thailand
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Independent Power Producers Association of India
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Edison Trading Spa - Italy
- Sakthi Sugars Limited - India
- International Coal Ventures Pvt Ltd - India
- Attock Cement Pakistan Limited
- Meralco Power Generation, Philippines
- Bhushan Steel Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Sical Logistics Limited - India
- Economic Council, Georgia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- ICICI Bank Limited - India
- Directorate Of Revenue Intelligence - India
- Thiess Contractors Indonesia
- Deloitte Consulting - India
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- GVK Power & Infra Limited - India
- Bhoruka Overseas - Indonesia
- Mercuria Energy - Indonesia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
- Iligan Light & Power Inc, Philippines
- Wood Mackenzie - Singapore
- Globalindo Alam Lestari - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Banpu Public Company Limited - Thailand
- Karaikal Port Pvt Ltd - India
- Africa Commodities Group - South Africa
- Metalloyd Limited - United Kingdom
- Miang Besar Coal Terminal - Indonesia
- Videocon Industries ltd - India
- Leighton Contractors Pty Ltd - Australia
- Madhucon Powers Ltd - India
- Essar Steel Hazira Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Malabar Cements Ltd - India
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- India Bulls Power Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Samtan Co., Ltd - South Korea
- Gujarat Mineral Development Corp Ltd - India
- Cement Manufacturers Association - India
- Maheswari Brothers Coal Limited - India
- Power Finance Corporation Ltd., India
- Posco Energy - South Korea
- Interocean Group of Companies - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Planning Commission, India
- Asmin Koalindo Tuhup - Indonesia
- Makarim & Taira - Indonesia
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Romanian Commodities Exchange
- Karbindo Abesyapradhi - Indoneisa
- Oldendorff Carriers - Singapore
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Eastern Coal Council - USA
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Mjunction Services Limited - India
- Savvy Resources Ltd - HongKong
- VISA Power Limited - India
- McConnell Dowell - Australia
- Indo Tambangraya Megah - Indonesia
- Global Business Power Corporation, Philippines
- Energy Development Corp, Philippines
- Parry Sugars Refinery, India
- Chamber of Mines of South Africa
- PetroVietnam Power Coal Import and Supply Company
- IHS Mccloskey Coal Group - USA
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Ceylon Electricity Board - Sri Lanka
- Offshore Bulk Terminal Pte Ltd, Singapore
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Maharashtra Electricity Regulatory Commission - India
- Port Waratah Coal Services - Australia
- Semirara Mining and Power Corporation, Philippines
- Aditya Birla Group - India
- Bukit Asam (Persero) Tbk - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Altura Mining Limited, Indonesia
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Alfred C Toepfer International GmbH - Germany
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Indian Energy Exchange, India
- Coastal Gujarat Power Limited - India
- Timah Investasi Mineral - Indoneisa
- San Jose City I Power Corp, Philippines
- Australian Commodity Traders Exchange
- GAC Shipping (India) Pvt Ltd
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Commonwealth Bank - Australia
- Sindya Power Generating Company Private Ltd
- Standard Chartered Bank - UAE
- Electricity Authority, New Zealand
- PNOC Exploration Corporation - Philippines
- Coal and Oil Company - UAE
- Global Green Power PLC Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Energy Link Ltd, New Zealand
- Directorate General of MIneral and Coal - Indonesia
- Simpson Spence & Young - Indonesia
- Bhatia International Limited - India
- Renaissance Capital - South Africa
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