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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, 06 October 22
COAL INDIA ASKED TO ENHANCE SUPPLY TO THERMAL POWER PLANTS - IANS
With the festival season round the corner, Coal India Ltd. has been directed by the government to scale up dispatch to thermal power plants.
&n ...
Wednesday, 05 October 22
BUNKER PRICES DOWN AGAIN; IS THERE MORE TO COME? - INTEGR8 FUELS
It’s the economy…..”
VLSFO prices are now back to levels at the start of this year. After all the extremes of thi ...
Wednesday, 05 October 22
MARKET INSIGHT - INTERMODAL
Amid the looming western sanctions on Russia, the country is challenged to pivot its energy markets away from Europe and toward the East. Yet, Russ ...
Tuesday, 04 October 22
A REMARKABLE SHIFT IN FORTUNES HAS BEEN NOTED IN THE CRUDE OIL TANKER MARKETS - ALLIED SHIPPING
A remarkable shift in fortunes has been noted in the crude oil tanker markets over the past month, yet despite these shifts being seemingly in thei ...
Tuesday, 04 October 22
OIL PRICES COULD SOON RETURN TO $100 AS OPEC+ CONSIDERS ‘HISTORIC’ CUT, ANALYSTS SAY - CNBC
An influential alliance of some of the world’s most powerful oil producers is reportedly considering their largest output cut since the start ...
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- Parliament of New Zealand
- Independent Power Producers Association of India
- Rashtriya Ispat Nigam Limited - India
- SN Aboitiz Power Inc, Philippines
- Banpu Public Company Limited - Thailand
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- Pendopo Energi Batubara - Indonesia
- Aboitiz Power Corporation - Philippines
- SMC Global Power, Philippines
- Tata Chemicals Ltd - India
- Indo Tambangraya Megah - Indonesia
- ICICI Bank Limited - India
- PowerSource Philippines DevCo
- Videocon Industries ltd - India
- Economic Council, Georgia
- Gujarat Electricity Regulatory Commission - India
- Gujarat Sidhee Cement - India
- White Energy Company Limited
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Africa Commodities Group - South Africa
- Price Waterhouse Coopers - Russia
- Romanian Commodities Exchange
- Carbofer General Trading SA - India
- Metalloyd Limited - United Kingdom
- Essar Steel Hazira Ltd - India
- Timah Investasi Mineral - Indoneisa
- Samtan Co., Ltd - South Korea
- Binh Thuan Hamico - Vietnam
- Ambuja Cements Ltd - India
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Bukit Makmur.PT - Indonesia
- Edison Trading Spa - Italy
- Antam Resourcindo - Indonesia
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- GMR Energy Limited - India
- Toyota Tsusho Corporation, Japan
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Billiton Holdings Pty Ltd - Australia
- The State Trading Corporation of India Ltd
- Kartika Selabumi Mining - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Formosa Plastics Group - Taiwan
- Intertek Mineral Services - Indonesia
- Barasentosa Lestari - Indonesia
- Bayan Resources Tbk. - Indonesia
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Indian Oil Corporation Limited
- Thai Mozambique Logistica
- European Bulk Services B.V. - Netherlands
- Eastern Coal Council - USA
- Kepco SPC Power Corporation, Philippines
- Posco Energy - South Korea
- Bank of Tokyo Mitsubishi UFJ Ltd
- Krishnapatnam Port Company Ltd. - India
- McConnell Dowell - Australia
- Vizag Seaport Private Limited - India
- Salva Resources Pvt Ltd - India
- ASAPP Information Group - India
- Jindal Steel & Power Ltd - India
- South Luzon Thermal Energy Corporation
- Sical Logistics Limited - India
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- Coal and Oil Company - UAE
- Semirara Mining and Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Bhushan Steel Limited - India
- Deloitte Consulting - India
- Tamil Nadu electricity Board
- Maheswari Brothers Coal Limited - India
- OPG Power Generation Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Riau Bara Harum - Indonesia
- Siam City Cement PLC, Thailand
- SMG Consultants - Indonesia
- Dalmia Cement Bharat India
- Karaikal Port Pvt Ltd - India
- Globalindo Alam Lestari - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Kobexindo Tractors - Indoneisa
- LBH Netherlands Bv - Netherlands
- PTC India Limited - India
- Leighton Contractors Pty Ltd - Australia
- Parry Sugars Refinery, India
- Pipit Mutiara Jaya. PT, Indonesia
- Kumho Petrochemical, South Korea
- Coalindo Energy - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Directorate General of MIneral and Coal - Indonesia
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Sarangani Energy Corporation, Philippines
- Makarim & Taira - Indonesia
- Orica Australia Pty. Ltd.
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Xindia Steels Limited - India
- Iligan Light & Power Inc, Philippines
- Bangladesh Power Developement Board
- Latin American Coal - Colombia
- Global Coal Blending Company Limited - Australia
- Energy Link Ltd, New Zealand
- Siam City Cement - Thailand
- CIMB Investment Bank - Malaysia
- Jorong Barutama Greston.PT - Indonesia
- Coastal Gujarat Power Limited - India
- Goldman Sachs - Singapore
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Eastern Energy - Thailand
- Bahari Cakrawala Sebuku - Indonesia
- Aditya Birla Group - India
- Baramulti Group, Indonesia
- Power Finance Corporation Ltd., India
- Kohat Cement Company Ltd. - Pakistan
- Larsen & Toubro Limited - India
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Orica Mining Services - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Therma Luzon, Inc, Philippines
- Indonesian Coal Mining Association
- Ind-Barath Power Infra Limited - India
- Holcim Trading Pte Ltd - Singapore
- New Zealand Coal & Carbon
- Ministry of Finance - Indonesia
- Agrawal Coal Company - India
- Renaissance Capital - South Africa
- Wood Mackenzie - Singapore
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Port Waratah Coal Services - Australia
- Attock Cement Pakistan Limited
- MS Steel International - UAE
- Global Business Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bulk Trading Sa - Switzerland
- Marubeni Corporation - India
- Asmin Koalindo Tuhup - Indonesia
- IEA Clean Coal Centre - UK
- Petron Corporation, Philippines
- GVK Power & Infra Limited - India
- San Jose City I Power Corp, Philippines
- The Treasury - Australian Government
- Kalimantan Lumbung Energi - Indonesia
- Altura Mining Limited, Indonesia
- Oldendorff Carriers - Singapore
- Indogreen Group - Indonesia
- Ceylon Electricity Board - Sri Lanka
- AsiaOL BioFuels Corp., Philippines
- Central Java Power - Indonesia
- Bhoruka Overseas - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- PNOC Exploration Corporation - Philippines
- Meenaskhi Energy Private Limited - India
- Semirara Mining Corp, Philippines
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- TNB Fuel Sdn Bhd - Malaysia
- Global Green Power PLC Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- CNBM International Corporation - China
- Meralco Power Generation, Philippines
- India Bulls Power Limited - India
- Bukit Baiduri Energy - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Simpson Spence & Young - Indonesia
- Medco Energi Mining Internasional
- Petrochimia International Co. Ltd.- Taiwan
- Ministry of Transport, Egypt
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- Bhatia International Limited - India
- Lanco Infratech Ltd - India
- Sindya Power Generating Company Private Ltd
- Borneo Indobara - Indonesia
- Trasteel International SA, Italy
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Miang Besar Coal Terminal - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Chettinad Cement Corporation Ltd - India
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Planning Commission, India
- Sakthi Sugars Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- The University of Queensland
- Kaltim Prima Coal - Indonesia
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Minerals Council of Australia
- London Commodity Brokers - England
- International Coal Ventures Pvt Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Commonwealth Bank - Australia
- Interocean Group of Companies - India
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