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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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Wednesday, 31 May 17
MARKET INSIGHT - KONSTANTINOS KAKAVITSAS
In the next episode of the oil market; The market reacts to OPEC’s production cut extension, the US shale oil producers are ruining the carte ...
Tuesday, 30 May 17
MARKET ANALYSIS - GEORGE LAZARIDIS
Despite the fair performance that has been noted in the Chinese economy over the past 5 months, we have started to see an increase in the skepticis ...
Friday, 26 May 17
MOST COAL PLANTS IN THE UNITED STATES WERE BUILT BEFORE 1990 - EIA
Coal-fired electricity generators accounted for 25% of operating electricity generating capacity in the United States and generated about 30% of U. ...
Friday, 26 May 17
U.S WEEKLY COAL OUTPUT ESTIMATE UP 6.3% W/W
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 14.3 million short ton ...
Wednesday, 24 May 17
LR MARKET IT SEEMS THAT EARNINGS ARE STILL UNDER PRESSURE - INTERMODAL
As we are approaching the summer season, the Clean Product market appears poised to become more challenging, either on East or West of Suez.
L ...
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- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Georgia Ports Authority, United States
- India Bulls Power Limited - India
- IHS Mccloskey Coal Group - USA
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Sindya Power Generating Company Private Ltd
- Savvy Resources Ltd - HongKong
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
- Banpu Public Company Limited - Thailand
- SMG Consultants - Indonesia
- ICICI Bank Limited - India
- Formosa Plastics Group - Taiwan
- Bulk Trading Sa - Switzerland
- Orica Australia Pty. Ltd.
- Economic Council, Georgia
- CIMB Investment Bank - Malaysia
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Standard Chartered Bank - UAE
- Therma Luzon, Inc, Philippines
- Eastern Energy - Thailand
- Vedanta Resources Plc - India
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Toyota Tsusho Corporation, Japan
- CNBM International Corporation - China
- Directorate General of MIneral and Coal - Indonesia
- SMC Global Power, Philippines
- PNOC Exploration Corporation - Philippines
- Minerals Council of Australia
- Wilmar Investment Holdings
- Australian Coal Association
- Binh Thuan Hamico - Vietnam
- Bukit Baiduri Energy - Indonesia
- Global Green Power PLC Corporation, Philippines
- GMR Energy Limited - India
- Mintek Dendrill Indonesia
- Straits Asia Resources Limited - Singapore
- Directorate Of Revenue Intelligence - India
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Lanco Infratech Ltd - India
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Ambuja Cements Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Agrawal Coal Company - India
- The University of Queensland
- Power Finance Corporation Ltd., India
- Gujarat Mineral Development Corp Ltd - India
- Indo Tambangraya Megah - Indonesia
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Ind-Barath Power Infra Limited - India
- Energy Development Corp, Philippines
- Africa Commodities Group - South Africa
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- South Luzon Thermal Energy Corporation
- Sojitz Corporation - Japan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Global Business Power Corporation, Philippines
- Bhoruka Overseas - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhatia International Limited - India
- Sakthi Sugars Limited - India
- Planning Commission, India
- PetroVietnam Power Coal Import and Supply Company
- Petron Corporation, Philippines
- Aditya Birla Group - India
- Deloitte Consulting - India
- Goldman Sachs - Singapore
- Riau Bara Harum - Indonesia
- Bangladesh Power Developement Board
- Uttam Galva Steels Limited - India
- Gujarat Electricity Regulatory Commission - India
- New Zealand Coal & Carbon
- Simpson Spence & Young - Indonesia
- Mercator Lines Limited - India
- Cigading International Bulk Terminal - Indonesia
- Indogreen Group - Indonesia
- Trasteel International SA, Italy
- Billiton Holdings Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Dalmia Cement Bharat India
- Mercuria Energy - Indonesia
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Posco Energy - South Korea
- Global Coal Blending Company Limited - Australia
- Jorong Barutama Greston.PT - Indonesia
- Grasim Industreis Ltd - India
- Interocean Group of Companies - India
- Altura Mining Limited, Indonesia
- Manunggal Multi Energi - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Pendopo Energi Batubara - Indonesia
- San Jose City I Power Corp, Philippines
- Mjunction Services Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bhushan Steel Limited - India
- The Treasury - Australian Government
- Antam Resourcindo - Indonesia
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Romanian Commodities Exchange
- Sinarmas Energy and Mining - Indonesia
- International Coal Ventures Pvt Ltd - India
- Edison Trading Spa - Italy
- Asmin Koalindo Tuhup - Indonesia
- LBH Netherlands Bv - Netherlands
- Electricity Generating Authority of Thailand
- Bukit Asam (Persero) Tbk - Indonesia
- Parliament of New Zealand
- GAC Shipping (India) Pvt Ltd
- Central Java Power - Indonesia
- Sical Logistics Limited - India
- Electricity Authority, New Zealand
- Renaissance Capital - South Africa
- Vizag Seaport Private Limited - India
- Maheswari Brothers Coal Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Price Waterhouse Coopers - Russia
- Barasentosa Lestari - Indonesia
- Cement Manufacturers Association - India
- Gujarat Sidhee Cement - India
- Madhucon Powers Ltd - India
- Aboitiz Power Corporation - Philippines
- Independent Power Producers Association of India
- White Energy Company Limited
- Kaltim Prima Coal - Indonesia
- London Commodity Brokers - England
- Coalindo Energy - Indonesia
- Eastern Coal Council - USA
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- PTC India Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Borneo Indobara - Indonesia
- Star Paper Mills Limited - India
- Jindal Steel & Power Ltd - India
- Tamil Nadu electricity Board
- Intertek Mineral Services - Indonesia
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Bharathi Cement Corporation - India
- Coal and Oil Company - UAE
- MS Steel International - UAE
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- SN Aboitiz Power Inc, Philippines
- McConnell Dowell - Australia
- Wood Mackenzie - Singapore
- Salva Resources Pvt Ltd - India
- Port Waratah Coal Services - Australia
- Marubeni Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Baramulti Group, Indonesia
- Kumho Petrochemical, South Korea
- Xindia Steels Limited - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement - Thailand
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Indika Energy - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Coastal Gujarat Power Limited - India
- Bayan Resources Tbk. - Indonesia
- Sarangani Energy Corporation, Philippines
- Latin American Coal - Colombia
- Thai Mozambique Logistica
- Metalloyd Limited - United Kingdom
- Indian Energy Exchange, India
- Iligan Light & Power Inc, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Ceylon Electricity Board - Sri Lanka
- Kobexindo Tractors - Indoneisa
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Carbofer General Trading SA - India
- Attock Cement Pakistan Limited
- Sree Jayajothi Cements Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kideco Jaya Agung - Indonesia
- Rio Tinto Coal - Australia
- Ministry of Mines - Canada
- Jaiprakash Power Ventures ltd
- Indonesian Coal Mining Association
- Globalindo Alam Lestari - Indonesia
- Tata Chemicals Ltd - India
- Siam City Cement PLC, Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- VISA Power Limited - India
- Kapuas Tunggal Persada - Indonesia
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