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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, 02 August 18
INDO / CHINA COAL RV'S IS PAYING AROUND USD 11,000 TO SUPRAS BSS DELIVERY SINGAPORE - FEARNLEYS
Capesize
The counter seasonally strong market during the summer months bodes well for the remainder of the year.
According ...
Wednesday, 01 August 18
JOKOWI CANCELS PLAN TO REVOKE COAL DMO - JP
President Joko "Jokowi" Widodo on Tuesday has canceled the government’s plan to revoke the domestic market obligation (DMO) for coa ...
Wednesday, 01 August 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
The dry bulk market activity over the past four weeks has remained stable when compared to the previous months. There are concerns with regards to ...
Tuesday, 31 July 18
INDONESIA UNLIKELY TO CHANGE COAL SUPPLY, PRICING RULES UNTIL 2019 - REUTERS
Indonesia is unlikely to change its rules on domestic coal supply and pricing until 2019, Coordinating Maritime Minister Luhut Pandjaitan said on M ...
Tuesday, 31 July 18
ENERGY MINISTRY REMAINS FIRM ON DMO POLICY FOR COAL - JP
The Energy and Mineral Resources Ministry has stressed that it will not cancel its policy on the domestic market obligation (DMO) for coal, as the ...
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- Straits Asia Resources Limited - Singapore
- Star Paper Mills Limited - India
- SN Aboitiz Power Inc, Philippines
- Central Java Power - Indonesia
- Videocon Industries ltd - India
- Kideco Jaya Agung - Indonesia
- Tamil Nadu electricity Board
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- Leighton Contractors Pty Ltd - Australia
- Bhushan Steel Limited - India
- Malabar Cements Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Neyveli Lignite Corporation Ltd, - India
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Indonesian Coal Mining Association
- McConnell Dowell - Australia
- Krishnapatnam Port Company Ltd. - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Uttam Galva Steels Limited - India
- Parry Sugars Refinery, India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Global Coal Blending Company Limited - Australia
- Australian Coal Association
- Orica Australia Pty. Ltd.
- Goldman Sachs - Singapore
- Ceylon Electricity Board - Sri Lanka
- Petron Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Posco Energy - South Korea
- Bahari Cakrawala Sebuku - Indonesia
- Indo Tambangraya Megah - Indonesia
- Renaissance Capital - South Africa
- Borneo Indobara - Indonesia
- Antam Resourcindo - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- IHS Mccloskey Coal Group - USA
- Madhucon Powers Ltd - India
- Marubeni Corporation - India
- Riau Bara Harum - Indonesia
- Ind-Barath Power Infra Limited - India
- Bhatia International Limited - India
- Power Finance Corporation Ltd., India
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- GN Power Mariveles Coal Plant, Philippines
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Planning Commission, India
- Heidelberg Cement - Germany
- Meenaskhi Energy Private Limited - India
- Vizag Seaport Private Limited - India
- Sree Jayajothi Cements Limited - India
- Mjunction Services Limited - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Coalindo Energy - Indonesia
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Indika Energy - Indonesia
- The Treasury - Australian Government
- Baramulti Group, Indonesia
- Energy Link Ltd, New Zealand
- Pipit Mutiara Jaya. PT, Indonesia
- Alfred C Toepfer International GmbH - Germany
- Kaltim Prima Coal - Indonesia
- The State Trading Corporation of India Ltd
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Central Electricity Authority - India
- Electricity Generating Authority of Thailand
- San Jose City I Power Corp, Philippines
- Global Business Power Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Miang Besar Coal Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercuria Energy - Indonesia
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Agrawal Coal Company - India
- Larsen & Toubro Limited - India
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- White Energy Company Limited
- MS Steel International - UAE
- Thiess Contractors Indonesia
- Ambuja Cements Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Oldendorff Carriers - Singapore
- CIMB Investment Bank - Malaysia
- Rio Tinto Coal - Australia
- European Bulk Services B.V. - Netherlands
- Trasteel International SA, Italy
- Ministry of Transport, Egypt
- Iligan Light & Power Inc, Philippines
- Aditya Birla Group - India
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Makarim & Taira - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Essar Steel Hazira Ltd - India
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Singapore Mercantile Exchange
- Binh Thuan Hamico - Vietnam
- Indian Oil Corporation Limited
- Samtan Co., Ltd - South Korea
- Interocean Group of Companies - India
- Latin American Coal - Colombia
- Africa Commodities Group - South Africa
- Banpu Public Company Limited - Thailand
- GMR Energy Limited - India
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Romanian Commodities Exchange
- Altura Mining Limited, Indonesia
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Formosa Plastics Group - Taiwan
- Price Waterhouse Coopers - Russia
- CNBM International Corporation - China
- Offshore Bulk Terminal Pte Ltd, Singapore
- Edison Trading Spa - Italy
- Ministry of Mines - Canada
- New Zealand Coal & Carbon
- Bayan Resources Tbk. - Indonesia
- ASAPP Information Group - India
- Cigading International Bulk Terminal - Indonesia
- Barasentosa Lestari - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Australian Commodity Traders Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Medco Energi Mining Internasional
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Dalmia Cement Bharat India
- Indogreen Group - Indonesia
- Commonwealth Bank - Australia
- GVK Power & Infra Limited - India
- SMC Global Power, Philippines
- Sindya Power Generating Company Private Ltd
- Holcim Trading Pte Ltd - Singapore
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Energy Development Corp, Philippines
- Manunggal Multi Energi - Indonesia
- Kapuas Tunggal Persada - Indonesia
- GAC Shipping (India) Pvt Ltd
- Thai Mozambique Logistica
- Semirara Mining and Power Corporation, Philippines
- Ministry of Finance - Indonesia
- ICICI Bank Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Xindia Steels Limited - India
- Siam City Cement - Thailand
- Attock Cement Pakistan Limited
- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Mintek Dendrill Indonesia
- Intertek Mineral Services - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Kumho Petrochemical, South Korea
- Parliament of New Zealand
- Carbofer General Trading SA - India
- Lanco Infratech Ltd - India
- Globalindo Alam Lestari - Indonesia
- Bharathi Cement Corporation - India
- Directorate General of MIneral and Coal - Indonesia
- Karaikal Port Pvt Ltd - India
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Bulk Trading Sa - Switzerland
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Economic Council, Georgia
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Savvy Resources Ltd - HongKong
- Mercator Lines Limited - India
- Aboitiz Power Corporation - Philippines
- The University of Queensland
- Minerals Council of Australia
- Maheswari Brothers Coal Limited - India
- Cement Manufacturers Association - India
- OPG Power Generation Pvt Ltd - India
- Toyota Tsusho Corporation, Japan
- Pendopo Energi Batubara - Indonesia
- SMG Consultants - Indonesia
- Indian Energy Exchange, India
- Karbindo Abesyapradhi - Indoneisa
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