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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, 10 August 22
THE FUTURE OF COAL: EIGHT KEY THEMES FROM THE GLOBAL COAL FORUM - WOOD MACKENZIE
Coal investors face a multi-layered and unavoidable challenge: markets distorted by war, trade constraints and the existential threat of the energy ...
Saturday, 06 August 22
SUMITOMO Q1 PROFIT RISES 45% ON STRONGER PRICES OF COAL, NICKEL - REUTERS
Japanese trading house Sumitomo Corp 8053.T said on Wednesday its net profit for the April-June quarter rose 45% to a record thanks to higher price ...
Saturday, 06 August 22
GERMANY'S ENERGY U-TURN: COAL INSTEAD OF GAS - DEUTSCHE WELLE
Berlin has realized it will never again import as much energy from Russia as before the Ukraine war. So the challenge is to wean Germany off its de ...
Saturday, 30 July 22
NUANCES OF FORCE MAJEURE CLAUSE - BALTIC EXCHANGE
Knowledge to Elevate
In NKD Maritime Limited v. Bart Maritime (No 2) Inc (Shagang Giant) [2022] EWHC 1615 (Comm), Bart Maritime (No 2) Inc (th ...
Saturday, 30 July 22
AEMO URGES QUICKER SHIFT TO RENEWABLES AMID COAL FAILURES AND SOARING FOSSIL FUEL COSTS
The Australian Energy Market Operator has called for an accelerated shift to wind and solar, backed up by batteries and other storage, as a devasta ...
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- New Zealand Coal & Carbon
- Chamber of Mines of South Africa
- Interocean Group of Companies - India
- Star Paper Mills Limited - India
- Coal and Oil Company - UAE
- Parliament of New Zealand
- IEA Clean Coal Centre - UK
- Indika Energy - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Wood Mackenzie - Singapore
- CIMB Investment Bank - Malaysia
- Manunggal Multi Energi - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Marubeni Corporation - India
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- GAC Shipping (India) Pvt Ltd
- Globalindo Alam Lestari - Indonesia
- Kumho Petrochemical, South Korea
- Parry Sugars Refinery, India
- Bayan Resources Tbk. - Indonesia
- Karaikal Port Pvt Ltd - India
- Larsen & Toubro Limited - India
- Billiton Holdings Pty Ltd - Australia
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- London Commodity Brokers - England
- Central Electricity Authority - India
- Directorate Of Revenue Intelligence - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Jindal Steel & Power Ltd - India
- Essar Steel Hazira Ltd - India
- PowerSource Philippines DevCo
- PetroVietnam Power Coal Import and Supply Company
- Mjunction Services Limited - India
- Orica Mining Services - Indonesia
- Africa Commodities Group - South Africa
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- SN Aboitiz Power Inc, Philippines
- ASAPP Information Group - India
- Kepco SPC Power Corporation, Philippines
- SMG Consultants - Indonesia
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- Vizag Seaport Private Limited - India
- Savvy Resources Ltd - HongKong
- Indogreen Group - Indonesia
- Makarim & Taira - Indonesia
- Sical Logistics Limited - India
- Bukit Baiduri Energy - Indonesia
- Wilmar Investment Holdings
- Power Finance Corporation Ltd., India
- Antam Resourcindo - Indonesia
- Bukit Makmur.PT - Indonesia
- Chettinad Cement Corporation Ltd - India
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Xindia Steels Limited - India
- South Luzon Thermal Energy Corporation
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Vijayanagar Sugar Pvt Ltd - India
- Rio Tinto Coal - Australia
- Toyota Tsusho Corporation, Japan
- Aditya Birla Group - India
- Miang Besar Coal Terminal - Indonesia
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Binh Thuan Hamico - Vietnam
- CNBM International Corporation - China
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- Electricity Authority, New Zealand
- Heidelberg Cement - Germany
- The University of Queensland
- PTC India Limited - India
- Sarangani Energy Corporation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Gujarat Electricity Regulatory Commission - India
- Thai Mozambique Logistica
- Sakthi Sugars Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Anglo American - United Kingdom
- Salva Resources Pvt Ltd - India
- Indian Oil Corporation Limited
- Bhatia International Limited - India
- Georgia Ports Authority, United States
- Trasteel International SA, Italy
- Gujarat Mineral Development Corp Ltd - India
- Latin American Coal - Colombia
- LBH Netherlands Bv - Netherlands
- Krishnapatnam Port Company Ltd. - India
- Meenaskhi Energy Private Limited - India
- ICICI Bank Limited - India
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Kideco Jaya Agung - Indonesia
- Australian Commodity Traders Exchange
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- AsiaOL BioFuels Corp., Philippines
- Aboitiz Power Corporation - Philippines
- Eastern Energy - Thailand
- Indonesian Coal Mining Association
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Posco Energy - South Korea
- PNOC Exploration Corporation - Philippines
- Ambuja Cements Ltd - India
- Metalloyd Limited - United Kingdom
- The State Trading Corporation of India Ltd
- San Jose City I Power Corp, Philippines
- Banpu Public Company Limited - Thailand
- Central Java Power - Indonesia
- Mercuria Energy - Indonesia
- Ministry of Mines - Canada
- Kapuas Tunggal Persada - Indonesia
- The Treasury - Australian Government
- Simpson Spence & Young - Indonesia
- Planning Commission, India
- Meralco Power Generation, Philippines
- Merrill Lynch Commodities Europe
- Deloitte Consulting - India
- Kohat Cement Company Ltd. - Pakistan
- Tamil Nadu electricity Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- International Coal Ventures Pvt Ltd - India
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bank of Tokyo Mitsubishi UFJ Ltd
- Thiess Contractors Indonesia
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Asmin Koalindo Tuhup - Indonesia
- TeaM Sual Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Semirara Mining Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Straits Asia Resources Limited - Singapore
- Rashtriya Ispat Nigam Limited - India
- Australian Coal Association
- GMR Energy Limited - India
- Intertek Mineral Services - Indonesia
- Baramulti Group, Indonesia
- Samtan Co., Ltd - South Korea
- European Bulk Services B.V. - Netherlands
- Mercator Lines Limited - India
- Dalmia Cement Bharat India
- Bhushan Steel Limited - India
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- Tata Chemicals Ltd - India
- Grasim Industreis Ltd - India
- Standard Chartered Bank - UAE
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Edison Trading Spa - Italy
- Timah Investasi Mineral - Indoneisa
- Maheswari Brothers Coal Limited - India
- Ministry of Transport, Egypt
- Goldman Sachs - Singapore
- Directorate General of MIneral and Coal - Indonesia
- Agrawal Coal Company - India
- Ind-Barath Power Infra Limited - India
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- Riau Bara Harum - Indonesia
- Iligan Light & Power Inc, Philippines
- Bhoruka Overseas - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Mintek Dendrill Indonesia
- Madhucon Powers Ltd - India
- Sree Jayajothi Cements Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement PLC, Thailand
- Singapore Mercantile Exchange
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- White Energy Company Limited
- Vedanta Resources Plc - India
- MS Steel International - UAE
- McConnell Dowell - Australia
- Siam City Cement - Thailand
- Global Coal Blending Company Limited - Australia
- Port Waratah Coal Services - Australia
- Malabar Cements Ltd - India
- Minerals Council of Australia
- Orica Australia Pty. Ltd.
- Jaiprakash Power Ventures ltd
- Attock Cement Pakistan Limited
- Coastal Gujarat Power Limited - India
- Independent Power Producers Association of India
- Kalimantan Lumbung Energi - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Global Business Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Renaissance Capital - South Africa
- Carbofer General Trading SA - India
- VISA Power Limited - India
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Economic Council, Georgia
- Energy Development Corp, Philippines
- Lanco Infratech Ltd - India
- Global Green Power PLC Corporation, Philippines
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