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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, 22 December 22
RUSSIAN OIL EXPORTS CRATER BY 54% IN THE FIRST FULL WEEK OF THE EU'S EMBARGO AMID A SHORTAGE OF TANKERS WILLING TO CARRY CARGOES - BUSINESS INSIDER
Since the European Union imposed its seaborne crude sanctions, Russian oil exports have tumbled by more than half, according to data compiled by Bl ...
Thursday, 22 December 22
CHINA TIGHTENS VERIFICATION OF SHIPS’ ENERGY CONSUMPTION DATA - GARD
From 22 December 2022, ships trading to Chinese ports must record their energy consumption data in accordance with the requirements of their Ship E ...
Thursday, 22 December 22
AN OVERVIEW OF THE LNG MARKET - VESSELSVALUE
LNG values have continued to strengthen, spurred by skyrocketing earnings that have surpassed last year’s record breaking peaks. In November, ...
Thursday, 22 December 22
COKING COAL SLUMPS AS TALKS ON AUSTRALIA-CHINA TRADE RIFT LOOM - REUTERS
Chinese coking coal futures dropped more than 3 per cent on Tuesday (Dec 20), extending losses, as supply of the steelmaking input might increase i ...
Thursday, 22 December 22
COAL AND GAS PRICE CAPS MAY COMPOUND POLITICAL RISK FOR AUSTRALIAN CORPORATES - FITCH RATINGS
Australia’s introduction of temporary price caps on domestic sales of gas and coal used for electricity generation will probably have limited ...
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- Electricity Authority, New Zealand
- Madhucon Powers Ltd - India
- Coastal Gujarat Power Limited - India
- South Luzon Thermal Energy Corporation
- Vedanta Resources Plc - India
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Interocean Group of Companies - India
- London Commodity Brokers - England
- Mintek Dendrill Indonesia
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Meenaskhi Energy Private Limited - India
- Parry Sugars Refinery, India
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- European Bulk Services B.V. - Netherlands
- Maharashtra Electricity Regulatory Commission - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Straits Asia Resources Limited - Singapore
- Larsen & Toubro Limited - India
- Wilmar Investment Holdings
- Alfred C Toepfer International GmbH - Germany
- Independent Power Producers Association of India
- Electricity Generating Authority of Thailand
- GAC Shipping (India) Pvt Ltd
- Xindia Steels Limited - India
- VISA Power Limited - India
- Bangladesh Power Developement Board
- Vizag Seaport Private Limited - India
- Minerals Council of Australia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Mercator Lines Limited - India
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Banpu Public Company Limited - Thailand
- Coal and Oil Company - UAE
- Billiton Holdings Pty Ltd - Australia
- Medco Energi Mining Internasional
- Indo Tambangraya Megah - Indonesia
- International Coal Ventures Pvt Ltd - India
- Cement Manufacturers Association - India
- Romanian Commodities Exchange
- Timah Investasi Mineral - Indoneisa
- Indogreen Group - Indonesia
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- ASAPP Information Group - India
- Siam City Cement PLC, Thailand
- The Treasury - Australian Government
- Sojitz Corporation - Japan
- Rio Tinto Coal - Australia
- Antam Resourcindo - Indonesia
- Directorate Of Revenue Intelligence - India
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Manunggal Multi Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Mercuria Energy - Indonesia
- Toyota Tsusho Corporation, Japan
- The University of Queensland
- Kideco Jaya Agung - Indonesia
- Planning Commission, India
- India Bulls Power Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Goldman Sachs - Singapore
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- GN Power Mariveles Coal Plant, Philippines
- Ministry of Transport, Egypt
- Energy Development Corp, Philippines
- Bulk Trading Sa - Switzerland
- Gujarat Mineral Development Corp Ltd - India
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Deloitte Consulting - India
- Barasentosa Lestari - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Bukit Makmur.PT - Indonesia
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- PTC India Limited - India
- Bukit Baiduri Energy - Indonesia
- Indian Oil Corporation Limited
- Dalmia Cement Bharat India
- Uttam Galva Steels Limited - India
- McConnell Dowell - Australia
- Gujarat Sidhee Cement - India
- Therma Luzon, Inc, Philippines
- Sical Logistics Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Indian Energy Exchange, India
- Holcim Trading Pte Ltd - Singapore
- Anglo American - United Kingdom
- Power Finance Corporation Ltd., India
- Wood Mackenzie - Singapore
- Global Coal Blending Company Limited - Australia
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Mjunction Services Limited - India
- IHS Mccloskey Coal Group - USA
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Bhushan Steel Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Malabar Cements Ltd - India
- IEA Clean Coal Centre - UK
- Orica Mining Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Ministry of Finance - Indonesia
- Tamil Nadu electricity Board
- Sree Jayajothi Cements Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Bhoruka Overseas - Indonesia
- Pendopo Energi Batubara - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Metalloyd Limited - United Kingdom
- Energy Link Ltd, New Zealand
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- Ind-Barath Power Infra Limited - India
- Lanco Infratech Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Africa Commodities Group - South Africa
- Sindya Power Generating Company Private Ltd
- Edison Trading Spa - Italy
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- Siam City Cement - Thailand
- Semirara Mining and Power Corporation, Philippines
- Essar Steel Hazira Ltd - India
- Formosa Plastics Group - Taiwan
- Star Paper Mills Limited - India
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Semirara Mining Corp, Philippines
- Petron Corporation, Philippines
- Parliament of New Zealand
- Indonesian Coal Mining Association
- Cigading International Bulk Terminal - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Maheswari Brothers Coal Limited - India
- GVK Power & Infra Limited - India
- Leighton Contractors Pty Ltd - Australia
- Ministry of Mines - Canada
- White Energy Company Limited
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Salva Resources Pvt Ltd - India
- Altura Mining Limited, Indonesia
- Chettinad Cement Corporation Ltd - India
- Georgia Ports Authority, United States
- Kepco SPC Power Corporation, Philippines
- Bhatia International Limited - India
- New Zealand Coal & Carbon
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ceylon Electricity Board - Sri Lanka
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Eastern Energy - Thailand
- Neyveli Lignite Corporation Ltd, - India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Samtan Co., Ltd - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- LBH Netherlands Bv - Netherlands
- Jindal Steel & Power Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Price Waterhouse Coopers - Russia
- Baramulti Group, Indonesia
- GMR Energy Limited - India
- Riau Bara Harum - Indonesia
- TeaM Sual Corporation - Philippines
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Rashtriya Ispat Nigam Limited - India
- Videocon Industries ltd - India
- Australian Commodity Traders Exchange
- Tata Chemicals Ltd - India
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Borneo Indobara - Indonesia
- Attock Cement Pakistan Limited
- Thiess Contractors Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Heidelberg Cement - Germany
- Makarim & Taira - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Central Java Power - Indonesia
- Marubeni Corporation - India
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Kobexindo Tractors - Indoneisa
- Savvy Resources Ltd - HongKong
- Trasteel International SA, Italy
- Renaissance Capital - South Africa
- Sakthi Sugars Limited - India
- Iligan Light & Power Inc, Philippines
- Meralco Power Generation, Philippines
- ICICI Bank Limited - India
- Aboitiz Power Corporation - Philippines
- Merrill Lynch Commodities Europe
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