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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, 16 September 22
WHEN IS A VESSEL'S INCOME EARNING CAPACITY AT RISK? 'CONTROLLED INCOME CAN BE A KEY OF SUCCESS' - MARASCO MARINE
Managing marine risks is not an easy task, which requires special knowledge and expertise on the subject per se. Customarily, big ship management c ...
Friday, 16 September 22
DRY BULK MARKET: EU’S BAN ON RUSSIAN COAL LIFTS DEMAND DESPITE ECONOMIC HEADWINDS - BIMCO
Highlights
– The Baltic Exchange Dry Index (BDI) peaked in late May and has since fallen sharply as lower Chinese demand and adverse glob ...
Friday, 16 September 22
BIMCO EMBARKS ON NEW STANDARD FOR “QUIET ENJOYMENT”
KNOWLEDGE TO ELEVATE
A newly set-up BIMCO drafting team involving a cross-section of shipowners, charterers, financing and leasing i ...
Friday, 16 September 22
INDIAN COAL PRODUCTION TO RISE 150 PER CENT IN 10 YEARS: CENTRE - EXPRESS NEWS SERVICE
The Union Ministry of Mines is expecting 150 per cent growth in coal production 10 years down the line as a result of coal reforms that had been us ...
Thursday, 15 September 22
MARKET INSIGHT - INTERMODAL
While the Organization of Petroleum Exporting Countries and its allies agreed on a 100,000 b/d output cut last week, oil flows are in the spotlight ...
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- Makarim & Taira - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- The University of Queensland
- Australian Coal Association
- Indika Energy - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- TNB Fuel Sdn Bhd - Malaysia
- SN Aboitiz Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- SMG Consultants - Indonesia
- Kepco SPC Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- LBH Netherlands Bv - Netherlands
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Australian Commodity Traders Exchange
- International Coal Ventures Pvt Ltd - India
- Parliament of New Zealand
- South Luzon Thermal Energy Corporation
- Kaltim Prima Coal - Indonesia
- Borneo Indobara - Indonesia
- Coastal Gujarat Power Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Siam City Cement PLC, Thailand
- Sojitz Corporation - Japan
- Neyveli Lignite Corporation Ltd, - India
- Miang Besar Coal Terminal - Indonesia
- Global Coal Blending Company Limited - Australia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Jindal Steel & Power Ltd - India
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- New Zealand Coal & Carbon
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- Globalindo Alam Lestari - Indonesia
- PNOC Exploration Corporation - Philippines
- Altura Mining Limited, Indonesia
- Gujarat Sidhee Cement - India
- Mercator Lines Limited - India
- Videocon Industries ltd - India
- PowerSource Philippines DevCo
- Kideco Jaya Agung - Indonesia
- Kobexindo Tractors - Indoneisa
- Aditya Birla Group - India
- Thai Mozambique Logistica
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- San Jose City I Power Corp, Philippines
- Petron Corporation, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Anglo American - United Kingdom
- Africa Commodities Group - South Africa
- Goldman Sachs - Singapore
- IEA Clean Coal Centre - UK
- Bahari Cakrawala Sebuku - Indonesia
- Energy Link Ltd, New Zealand
- Indonesian Coal Mining Association
- Ministry of Mines - Canada
- IHS Mccloskey Coal Group - USA
- Siam City Cement - Thailand
- Gujarat Electricity Regulatory Commission - India
- Toyota Tsusho Corporation, Japan
- Wilmar Investment Holdings
- Savvy Resources Ltd - HongKong
- Interocean Group of Companies - India
- Sakthi Sugars Limited - India
- Metalloyd Limited - United Kingdom
- Leighton Contractors Pty Ltd - Australia
- Eastern Coal Council - USA
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Iligan Light & Power Inc, Philippines
- Planning Commission, India
- Carbofer General Trading SA - India
- Ambuja Cements Ltd - India
- Electricity Generating Authority of Thailand
- Attock Cement Pakistan Limited
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- Sical Logistics Limited - India
- Sindya Power Generating Company Private Ltd
- ASAPP Information Group - India
- Romanian Commodities Exchange
- OPG Power Generation Pvt Ltd - India
- Antam Resourcindo - Indonesia
- Bhatia International Limited - India
- Mjunction Services Limited - India
- Directorate Of Revenue Intelligence - India
- CNBM International Corporation - China
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- Standard Chartered Bank - UAE
- Alfred C Toepfer International GmbH - Germany
- Indian Oil Corporation Limited
- Medco Energi Mining Internasional
- Renaissance Capital - South Africa
- Tamil Nadu electricity Board
- Posco Energy - South Korea
- Jorong Barutama Greston.PT - Indonesia
- Cement Manufacturers Association - India
- Latin American Coal - Colombia
- Bhushan Steel Limited - India
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- MS Steel International - UAE
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Rio Tinto Coal - Australia
- Central Electricity Authority - India
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- AsiaOL BioFuels Corp., Philippines
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- Electricity Authority, New Zealand
- Commonwealth Bank - Australia
- Meenaskhi Energy Private Limited - India
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- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- The Treasury - Australian Government
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- Sinarmas Energy and Mining - Indonesia
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- Ministry of Finance - Indonesia
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- GAC Shipping (India) Pvt Ltd
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- Coal and Oil Company - UAE
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining Corp, Philippines
- Billiton Holdings Pty Ltd - Australia
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Bukit Makmur.PT - Indonesia
- Ministry of Transport, Egypt
- Krishnapatnam Port Company Ltd. - India
- Intertek Mineral Services - Indonesia
- Eastern Energy - Thailand
- Vijayanagar Sugar Pvt Ltd - India
- Minerals Council of Australia
- Bangladesh Power Developement Board
- Economic Council, Georgia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Vedanta Resources Plc - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mercuria Energy - Indonesia
- Independent Power Producers Association of India
- Global Business Power Corporation, Philippines
- Malabar Cements Ltd - India
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- India Bulls Power Limited - India
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- White Energy Company Limited
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- Kapuas Tunggal Persada - Indonesia
- Therma Luzon, Inc, Philippines
- Aboitiz Power Corporation - Philippines
- The State Trading Corporation of India Ltd
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- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
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- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Port Waratah Coal Services - Australia
- Karbindo Abesyapradhi - Indoneisa
- Kumho Petrochemical, South Korea
- Cigading International Bulk Terminal - Indonesia
- GVK Power & Infra Limited - India
- Pendopo Energi Batubara - Indonesia
- Oldendorff Carriers - Singapore
- Orica Mining Services - Indonesia
- Price Waterhouse Coopers - Russia
- Indian Energy Exchange, India
- Lanco Infratech Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Riau Bara Harum - Indonesia
- Essar Steel Hazira Ltd - India
- Chamber of Mines of South Africa
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- GN Power Mariveles Coal Plant, Philippines
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