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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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Thursday, 26 January 23
AUSTRALIA'S CORONADO GLOBAL SEES COAL PRICES RISING ON RESUMING CHINA IMPORTS - REUTERS
Australia’s Coronado Global Resources said on Tuesday resuming metallurgical coal imports to China would likely push sea-borne coal prices hi ...
Monday, 23 January 23
CHINA'S MAJOR COAL-PRODUCING PROVINCE ACCELERATES DIGITAL TRANSFORMATION - XINHUA
At Chindata Group’s big-data industrial park in Lingqiu County of Datong City, hundreds of thousands of servers are running round-the-clock t ...
Monday, 23 January 23
CHINA'S COAL-RICH PROVINCE SEES COAL PRODUCTION INCREASE IN 2022 - XINHUA
North China’s coal-rich province of Shanxi saw its coal production hit 1.31 billion tonnes in 2022, up 8.7 percent year on year, local author ...
Wednesday, 18 January 23
MARKET INSIGHT - INTERMODAL
From Feb 5, another price cap will be introduced to Russian fuels and oil products, adding to the one for crude oil, already in place from Dec. 3. ...
Tuesday, 17 January 23
FRAUD IS THE BIGGEST THREAT TO CARGO LOSSES - TT CLUB
The almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within ...
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- Indika Energy - Indonesia
- Uttam Galva Steels Limited - India
- Makarim & Taira - Indonesia
- CNBM International Corporation - China
- Aboitiz Power Corporation - Philippines
- Central Electricity Authority - India
- Kohat Cement Company Ltd. - Pakistan
- Bhoruka Overseas - Indonesia
- GVK Power & Infra Limited - India
- Intertek Mineral Services - Indonesia
- Global Green Power PLC Corporation, Philippines
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Formosa Plastics Group - Taiwan
- LBH Netherlands Bv - Netherlands
- Mercator Lines Limited - India
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Malabar Cements Ltd - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Mjunction Services Limited - India
- Semirara Mining Corp, Philippines
- TeaM Sual Corporation - Philippines
- Orica Australia Pty. Ltd.
- IHS Mccloskey Coal Group - USA
- Global Business Power Corporation, Philippines
- ICICI Bank Limited - India
- MS Steel International - UAE
- Coal and Oil Company - UAE
- Independent Power Producers Association of India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- ASAPP Information Group - India
- Meenaskhi Energy Private Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Indian Oil Corporation Limited
- Jorong Barutama Greston.PT - Indonesia
- Energy Link Ltd, New Zealand
- Bukit Makmur.PT - Indonesia
- Grasim Industreis Ltd - India
- GMR Energy Limited - India
- Mercuria Energy - Indonesia
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- SN Aboitiz Power Inc, Philippines
- Pendopo Energi Batubara - Indonesia
- Borneo Indobara - Indonesia
- Carbofer General Trading SA - India
- CIMB Investment Bank - Malaysia
- Georgia Ports Authority, United States
- Bhatia International Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Commonwealth Bank - Australia
- Energy Development Corp, Philippines
- Romanian Commodities Exchange
- Wood Mackenzie - Singapore
- Rio Tinto Coal - Australia
- Petrochimia International Co. Ltd.- Taiwan
- VISA Power Limited - India
- Wilmar Investment Holdings
- Standard Chartered Bank - UAE
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Indonesian Coal Mining Association
- Maheswari Brothers Coal Limited - India
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Mintek Dendrill Indonesia
- Planning Commission, India
- Sojitz Corporation - Japan
- Power Finance Corporation Ltd., India
- Bayan Resources Tbk. - Indonesia
- Miang Besar Coal Terminal - Indonesia
- McConnell Dowell - Australia
- Altura Mining Limited, Indonesia
- Bhushan Steel Limited - India
- Siam City Cement - Thailand
- Australian Commodity Traders Exchange
- Savvy Resources Ltd - HongKong
- IEA Clean Coal Centre - UK
- Sarangani Energy Corporation, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Xindia Steels Limited - India
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Timah Investasi Mineral - Indoneisa
- Krishnapatnam Port Company Ltd. - India
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bharathi Cement Corporation - India
- Sical Logistics Limited - India
- Karbindo Abesyapradhi - Indoneisa
- New Zealand Coal & Carbon
- Cigading International Bulk Terminal - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- White Energy Company Limited
- Edison Trading Spa - Italy
- Star Paper Mills Limited - India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Coalindo Energy - Indonesia
- Trasteel International SA, Italy
- Videocon Industries ltd - India
- Heidelberg Cement - Germany
- Parry Sugars Refinery, India
- Price Waterhouse Coopers - Russia
- Parliament of New Zealand
- India Bulls Power Limited - India
- Thiess Contractors Indonesia
- Baramulti Group, Indonesia
- Kartika Selabumi Mining - Indonesia
- Attock Cement Pakistan Limited
- The University of Queensland
- Aditya Birla Group - India
- Indian Energy Exchange, India
- Central Java Power - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- Ministry of Finance - Indonesia
- Kepco SPC Power Corporation, Philippines
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Sinarmas Energy and Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Goldman Sachs - Singapore
- Alfred C Toepfer International GmbH - Germany
- Economic Council, Georgia
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- Metalloyd Limited - United Kingdom
- Chamber of Mines of South Africa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Australian Coal Association
- Tata Chemicals Ltd - India
- London Commodity Brokers - England
- Deloitte Consulting - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Lanco Infratech Ltd - India
- International Coal Ventures Pvt Ltd - India
- Global Coal Blending Company Limited - Australia
- Gujarat Sidhee Cement - India
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- GAC Shipping (India) Pvt Ltd
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Africa Commodities Group - South Africa
- The Treasury - Australian Government
- Marubeni Corporation - India
- Interocean Group of Companies - India
- Neyveli Lignite Corporation Ltd, - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Ministry of Mines - Canada
- Latin American Coal - Colombia
- Samtan Co., Ltd - South Korea
- Medco Energi Mining Internasional
- Binh Thuan Hamico - Vietnam
- Kapuas Tunggal Persada - Indonesia
- Ambuja Cements Ltd - India
- Jindal Steel & Power Ltd - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Transport, Egypt
- Barasentosa Lestari - Indonesia
- Merrill Lynch Commodities Europe
- Ind-Barath Power Infra Limited - India
- PTC India Limited - India
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
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- SMC Global Power, Philippines
- Madhucon Powers Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Banpu Public Company Limited - Thailand
- Rashtriya Ispat Nigam Limited - India
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- Siam City Cement PLC, Thailand
- Kalimantan Lumbung Energi - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Tamil Nadu electricity Board
- Port Waratah Coal Services - Australia
- Dalmia Cement Bharat India
- Posco Energy - South Korea
- PetroVietnam Power Coal Import and Supply Company
- Eastern Energy - Thailand
- Thai Mozambique Logistica
- Petron Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Directorate Of Revenue Intelligence - India
- Minerals Council of Australia
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- Ceylon Electricity Board - Sri Lanka
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- Agrawal Coal Company - India
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- Kumho Petrochemical, South Korea
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