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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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Friday, 18 November 22
REALITIES OF LOI LIABILITIES - BALTIC EXCHANGE
KNOWLEDGE TO ELEVATE
The cargo misdelivery claim in Trafigura Maritime Logistics Pte Ltd v. Clearlake Shipping Pte Ltd (Miracle Hope) [2022] E ...
Tuesday, 15 November 22
CHINA SEES RISING COAL STORAGE AMID SUPPLY PUSH - XINHUA
Coal stockpiles at China’s power plants have seen considerable increases, ensuring energy supply for the winter, the country’s energy r ...
Tuesday, 15 November 22
SEABORNE THERMAL COAL PRICES START TO EASE, BUT PROCESS IS UNEVEN - REUTERS
Prices for seaborne thermal coal have started to drop as fears of a winter energy crunch ease, but the rate of decline has varied across the differ ...
Thursday, 10 November 22
INDIA: THERMAL PLANTS HAVE ADEQUATE COAL STOCKS AT 25.6 MILLION TONNES, SAYS GOVT - IANS
The coal stock with domestic dry fuel-based power plants, as on October 31, was 25.6 million tonnes, the government said, adding that the availabil ...
Tuesday, 08 November 22
OUTLOOK ON CHINA’S WEAKENED BASIC MATERIALS SECTOR CLOUDED BY POLICY SWINGS - FITCH RATINGS
Fitch Ratings expects basic materials demand in China to improve qoq in 4Q22, driven by seasonally higher construction activity, solid infrastructu ...
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- TNB Fuel Sdn Bhd - Malaysia
- Pipit Mutiara Jaya. PT, Indonesia
- New Zealand Coal & Carbon
- Orica Mining Services - Indonesia
- Australian Coal Association
- Borneo Indobara - Indonesia
- Straits Asia Resources Limited - Singapore
- The Treasury - Australian Government
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Kepco SPC Power Corporation, Philippines
- AsiaOL BioFuels Corp., Philippines
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- GMR Energy Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Sarangani Energy Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Madhucon Powers Ltd - India
- Intertek Mineral Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Attock Cement Pakistan Limited
- Leighton Contractors Pty Ltd - Australia
- Kartika Selabumi Mining - Indonesia
- Timah Investasi Mineral - Indoneisa
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Formosa Plastics Group - Taiwan
- Mintek Dendrill Indonesia
- Toyota Tsusho Corporation, Japan
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Energy Link Ltd, New Zealand
- PowerSource Philippines DevCo
- Coal and Oil Company - UAE
- Gujarat Sidhee Cement - India
- Parry Sugars Refinery, India
- Maharashtra Electricity Regulatory Commission - India
- Romanian Commodities Exchange
- Semirara Mining Corp, Philippines
- Deloitte Consulting - India
- Interocean Group of Companies - India
- IHS Mccloskey Coal Group - USA
- European Bulk Services B.V. - Netherlands
- Sical Logistics Limited - India
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Metalloyd Limited - United Kingdom
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Ambuja Cements Ltd - India
- London Commodity Brokers - England
- Ministry of Transport, Egypt
- Power Finance Corporation Ltd., India
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Globalindo Alam Lestari - Indonesia
- CNBM International Corporation - China
- Agrawal Coal Company - India
- Aditya Birla Group - India
- ASAPP Information Group - India
- Karbindo Abesyapradhi - Indoneisa
- Chamber of Mines of South Africa
- Coalindo Energy - Indonesia
- Economic Council, Georgia
- Kalimantan Lumbung Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Central Java Power - Indonesia
- Maheswari Brothers Coal Limited - India
- Xindia Steels Limited - India
- The State Trading Corporation of India Ltd
- Heidelberg Cement - Germany
- Indo Tambangraya Megah - Indonesia
- Simpson Spence & Young - Indonesia
- SMG Consultants - Indonesia
- Bharathi Cement Corporation - India
- McConnell Dowell - Australia
- Iligan Light & Power Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Banpu Public Company Limited - Thailand
- White Energy Company Limited
- PTC India Limited - India
- Savvy Resources Ltd - HongKong
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- Sakthi Sugars Limited - India
- Africa Commodities Group - South Africa
- Holcim Trading Pte Ltd - Singapore
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Directorate General of MIneral and Coal - Indonesia
- Indogreen Group - Indonesia
- Electricity Authority, New Zealand
- MS Steel International - UAE
- Gujarat Mineral Development Corp Ltd - India
- Indonesian Coal Mining Association
- Neyveli Lignite Corporation Ltd, - India
- Wilmar Investment Holdings
- Indian Oil Corporation Limited
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Sree Jayajothi Cements Limited - India
- GVK Power & Infra Limited - India
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- Orica Australia Pty. Ltd.
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Bhatia International Limited - India
- Dalmia Cement Bharat India
- Siam City Cement - Thailand
- Ministry of Finance - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Carbofer General Trading SA - India
- ICICI Bank Limited - India
- Bukit Makmur.PT - Indonesia
- Minerals Council of Australia
- Bhoruka Overseas - Indonesia
- Indian Energy Exchange, India
- Sindya Power Generating Company Private Ltd
- Miang Besar Coal Terminal - Indonesia
- Georgia Ports Authority, United States
- Star Paper Mills Limited - India
- Ministry of Mines - Canada
- Baramulti Group, Indonesia
- Jindal Steel & Power Ltd - India
- Bangladesh Power Developement Board
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Samtan Co., Ltd - South Korea
- Posco Energy - South Korea
- South Luzon Thermal Energy Corporation
- Singapore Mercantile Exchange
- Alfred C Toepfer International GmbH - Germany
- Kobexindo Tractors - Indoneisa
- Altura Mining Limited, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Thai Mozambique Logistica
- Ind-Barath Power Infra Limited - India
- Port Waratah Coal Services - Australia
- Binh Thuan Hamico - Vietnam
- Tamil Nadu electricity Board
- Energy Development Corp, Philippines
- Petron Corporation, Philippines
- Cement Manufacturers Association - India
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Jaiprakash Power Ventures ltd
- Rashtriya Ispat Nigam Limited - India
- Antam Resourcindo - Indonesia
- International Coal Ventures Pvt Ltd - India
- Malabar Cements Ltd - India
- Mercuria Energy - Indonesia
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Videocon Industries ltd - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Makarim & Taira - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Electricity Generating Authority of Thailand
- PNOC Exploration Corporation - Philippines
- India Bulls Power Limited - India
- PetroVietnam Power Coal Import and Supply Company
- LBH Netherlands Bv - Netherlands
- Bulk Trading Sa - Switzerland
- Anglo American - United Kingdom
- Eastern Coal Council - USA
- Uttam Galva Steels Limited - India
- Global Business Power Corporation, Philippines
- Global Green Power PLC Corporation, Philippines
- OPG Power Generation Pvt Ltd - India
- Tata Chemicals Ltd - India
- Meralco Power Generation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Latin American Coal - Colombia
- VISA Power Limited - India
- Sojitz Corporation - Japan
- Eastern Energy - Thailand
- Mjunction Services Limited - India
- Marubeni Corporation - India
- The University of Queensland
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
- Lanco Infratech Ltd - India
- Therma Luzon, Inc, Philippines
- TeaM Sual Corporation - Philippines
- Directorate Of Revenue Intelligence - India
- Kumho Petrochemical, South Korea
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- Sinarmas Energy and Mining - Indonesia
- IEA Clean Coal Centre - UK
- Kohat Cement Company Ltd. - Pakistan
- Bahari Cakrawala Sebuku - Indonesia
- Merrill Lynch Commodities Europe
- Vizag Seaport Private Limited - India
- San Jose City I Power Corp, Philippines
- Ceylon Electricity Board - Sri Lanka
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