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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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Tuesday, 27 March 18
SHIPPING MARKET ANALYSIS - GERRY LATHROP
With the almost complete phase out of Tier II new-building slots on our door step, along with the plethora of emissions related articles seemingly ...
Friday, 23 March 18
RIO TINTO AGREES SALE OF HAIL CREEK AND VALERIA TO GLENCORE FOR $1.7 BILLION
Press Release: Rio Tinto has entered into a binding agreement with Glencore for the sale of its entire interests in the Hail Creek coal mine and th ...
Wednesday, 21 March 18
CHINA'S RAW COAL OUTPUT UP IN 2017, FIRST GROWTH SINCE 2014 - XINHUA
China’s raw coal output rose in 2017 due to rebounding demand and high-quality capacity, according to the National Bureau of Statistics (NBS) ...
Wednesday, 21 March 18
MARKET INSIGHT - CHRISTOPHER T. WHITTY
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Tuesday, 20 March 18
SHIPPING MARKET ANALYSIS - GEORGE LAZARIDIS
It has been a chilling start to the week for the global economy, with the vast majority of stock exchanges noting a fair drop, after a series of se ...
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- The Treasury - Australian Government
- Global Business Power Corporation, Philippines
- Wilmar Investment Holdings
- Kumho Petrochemical, South Korea
- GN Power Mariveles Coal Plant, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Straits Asia Resources Limited - Singapore
- Kobexindo Tractors - Indoneisa
- Price Waterhouse Coopers - Russia
- Bangladesh Power Developement Board
- Bukit Makmur.PT - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- European Bulk Services B.V. - Netherlands
- Central Electricity Authority - India
- Uttam Galva Steels Limited - India
- Borneo Indobara - Indonesia
- Mercator Lines Limited - India
- Lanco Infratech Ltd - India
- Vizag Seaport Private Limited - India
- Karaikal Port Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Sical Logistics Limited - India
- Banpu Public Company Limited - Thailand
- Aboitiz Power Corporation - Philippines
- Dalmia Cement Bharat India
- Georgia Ports Authority, United States
- Bahari Cakrawala Sebuku - Indonesia
- Binh Thuan Hamico - Vietnam
- PowerSource Philippines DevCo
- Orica Australia Pty. Ltd.
- Ministry of Finance - Indonesia
- Energy Link Ltd, New Zealand
- The University of Queensland
- Manunggal Multi Energi - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- London Commodity Brokers - England
- Port Waratah Coal Services - Australia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Sakthi Sugars Limited - India
- AsiaOL BioFuels Corp., Philippines
- Merrill Lynch Commodities Europe
- Ministry of Mines - Canada
- Power Finance Corporation Ltd., India
- McConnell Dowell - Australia
- Standard Chartered Bank - UAE
- Altura Mining Limited, Indonesia
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- GVK Power & Infra Limited - India
- Indian Energy Exchange, India
- Timah Investasi Mineral - Indoneisa
- Simpson Spence & Young - Indonesia
- Kaltim Prima Coal - Indonesia
- Riau Bara Harum - Indonesia
- San Jose City I Power Corp, Philippines
- Goldman Sachs - Singapore
- Miang Besar Coal Terminal - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Marubeni Corporation - India
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Metalloyd Limited - United Kingdom
- Commonwealth Bank - Australia
- The State Trading Corporation of India Ltd
- Grasim Industreis Ltd - India
- White Energy Company Limited
- CIMB Investment Bank - Malaysia
- Ceylon Electricity Board - Sri Lanka
- Directorate General of MIneral and Coal - Indonesia
- Anglo American - United Kingdom
- Attock Cement Pakistan Limited
- CNBM International Corporation - China
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- Central Java Power - Indonesia
- Semirara Mining Corp, Philippines
- Alfred C Toepfer International GmbH - Germany
- LBH Netherlands Bv - Netherlands
- Jaiprakash Power Ventures ltd
- ASAPP Information Group - India
- PetroVietnam Power Coal Import and Supply Company
- Kohat Cement Company Ltd. - Pakistan
- Formosa Plastics Group - Taiwan
- Thiess Contractors Indonesia
- Energy Development Corp, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Iligan Light & Power Inc, Philippines
- Ambuja Cements Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Directorate Of Revenue Intelligence - India
- Bhatia International Limited - India
- Savvy Resources Ltd - HongKong
- South Luzon Thermal Energy Corporation
- SN Aboitiz Power Inc, Philippines
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- ICICI Bank Limited - India
- Parry Sugars Refinery, India
- Antam Resourcindo - Indonesia
- Eastern Coal Council - USA
- Thai Mozambique Logistica
- Intertek Mineral Services - Indonesia
- Sindya Power Generating Company Private Ltd
- PNOC Exploration Corporation - Philippines
- Krishnapatnam Port Company Ltd. - India
- Vedanta Resources Plc - India
- Posco Energy - South Korea
- Kartika Selabumi Mining - Indonesia
- Bukit Baiduri Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Orica Mining Services - Indonesia
- VISA Power Limited - India
- Malabar Cements Ltd - India
- Edison Trading Spa - Italy
- MS Steel International - UAE
- Maheswari Brothers Coal Limited - India
- Kideco Jaya Agung - Indonesia
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Agrawal Coal Company - India
- Leighton Contractors Pty Ltd - Australia
- Bhoruka Overseas - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Deloitte Consulting - India
- TeaM Sual Corporation - Philippines
- Ind-Barath Power Infra Limited - India
- Videocon Industries ltd - India
- Latin American Coal - Colombia
- Madhucon Powers Ltd - India
- Romanian Commodities Exchange
- Xindia Steels Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Mintek Dendrill Indonesia
- Coastal Gujarat Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Makarim & Taira - Indonesia
- Bulk Trading Sa - Switzerland
- Petron Corporation, Philippines
- Economic Council, Georgia
- Larsen & Toubro Limited - India
- PTC India Limited - India
- Indika Energy - Indonesia
- Star Paper Mills Limited - India
- Bayan Resources Tbk. - Indonesia
- Carbofer General Trading SA - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- OPG Power Generation Pvt Ltd - India
- Siam City Cement - Thailand
- Gujarat Mineral Development Corp Ltd - India
- India Bulls Power Limited - India
- Interocean Group of Companies - India
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Gujarat Electricity Regulatory Commission - India
- Sojitz Corporation - Japan
- Indogreen Group - Indonesia
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Australian Coal Association
- Siam City Cement PLC, Thailand
- Essar Steel Hazira Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Australian Commodity Traders Exchange
- Toyota Tsusho Corporation, Japan
- Tata Chemicals Ltd - India
- Gujarat Sidhee Cement - India
- Globalindo Alam Lestari - Indonesia
- SMC Global Power, Philippines
- Global Green Power PLC Corporation, Philippines
- Minerals Council of Australia
- Oldendorff Carriers - Singapore
- Bhushan Steel Limited - India
- International Coal Ventures Pvt Ltd - India
- Planning Commission, India
- Salva Resources Pvt Ltd - India
- Aditya Birla Group - India
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- SMG Consultants - Indonesia
- Indian Oil Corporation Limited
- Kepco SPC Power Corporation, Philippines
- Bharathi Cement Corporation - India
- Pendopo Energi Batubara - Indonesia
- Coal and Oil Company - UAE
- TNB Fuel Sdn Bhd - Malaysia
- Meralco Power Generation, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Heidelberg Cement - Germany
- Wood Mackenzie - Singapore
- Asmin Koalindo Tuhup - Indonesia
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Karbindo Abesyapradhi - Indoneisa
- GAC Shipping (India) Pvt Ltd
- Sarangani Energy Corporation, Philippines
- Meenaskhi Energy Private Limited - India
- Samtan Co., Ltd - South Korea
- Trasteel International SA, Italy
- Parliament of New Zealand
- Electricity Authority, New Zealand
- Coalindo Energy - Indonesia
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