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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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Tuesday, 26 July 22
CAP RUSSIA'S OIL PRICE NOW - PROJECT SYNDICATE
Though the price of oil has declined in recent weeks, it is still through the roof, filtering through to gasoline prices, and causing economic and ...
Tuesday, 26 July 22
WILL SOUTH AMERICA’S WINTER DEMAND DRAW LNG CARGOES AWAY FROM EUROPE? - ICIS
South America is now in the middle of its winter demand season. Last year the region increased its share of global LNG imports in winter, with Braz ...
Monday, 25 July 22
GLOBAL 2021 COAL-FIRED ELECTRICITY GENERATION SURGES TO RECORD HIGH - REUTERS
By contrast, mine output was still fractionally below the record set between 2012 and 2014 because older and less efficient coal generators have be ...
Saturday, 23 July 22
THE EU HAS BEEN REDUCING IMPORTS OF RUSSIAN REFINED OIL PRODUCTS SINCE MARCH - BANCHERO COSTA
The European Union could now ban the import and transit of fuel oil from Russia around six months ahead of the planned deadline, an EU official and ...
Saturday, 23 July 22
INDONESIA CONSIDERING SCRAPPING DOMESTIC SALES RULE FOR PALM OIL EXPORTS - REUTERS
Indonesia is considering removing a domestic sales requirement for palm oil exports because high inventories of the vegetable oil have been holding ...
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- Wood Mackenzie - Singapore
- ASAPP Information Group - India
- Thai Mozambique Logistica
- Mintek Dendrill Indonesia
- Price Waterhouse Coopers - Russia
- Mercator Lines Limited - India
- VISA Power Limited - India
- Binh Thuan Hamico - Vietnam
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Latin American Coal - Colombia
- White Energy Company Limited
- Meenaskhi Energy Private Limited - India
- Altura Mining Limited, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Cigading International Bulk Terminal - Indonesia
- CIMB Investment Bank - Malaysia
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Power Finance Corporation Ltd., India
- Singapore Mercantile Exchange
- Agrawal Coal Company - India
- Formosa Plastics Group - Taiwan
- Bukit Asam (Persero) Tbk - Indonesia
- Chamber of Mines of South Africa
- Marubeni Corporation - India
- Thiess Contractors Indonesia
- Bukit Baiduri Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GN Power Mariveles Coal Plant, Philippines
- Attock Cement Pakistan Limited
- OPG Power Generation Pvt Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Cement Manufacturers Association - India
- Wilmar Investment Holdings
- Indika Energy - Indonesia
- Semirara Mining Corp, Philippines
- Kobexindo Tractors - Indoneisa
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- European Bulk Services B.V. - Netherlands
- Energy Link Ltd, New Zealand
- Indo Tambangraya Megah - Indonesia
- Kideco Jaya Agung - Indonesia
- Larsen & Toubro Limited - India
- Parliament of New Zealand
- Energy Development Corp, Philippines
- Maheswari Brothers Coal Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Medco Energi Mining Internasional
- Orica Australia Pty. Ltd.
- Trasteel International SA, Italy
- TeaM Sual Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Australian Coal Association
- Coastal Gujarat Power Limited - India
- Ministry of Transport, Egypt
- Orica Mining Services - Indonesia
- Merrill Lynch Commodities Europe
- Essar Steel Hazira Ltd - India
- Edison Trading Spa - Italy
- Carbofer General Trading SA - India
- Petrochimia International Co. Ltd.- Taiwan
- Standard Chartered Bank - UAE
- Globalindo Alam Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Iligan Light & Power Inc, Philippines
- Interocean Group of Companies - India
- Aboitiz Power Corporation - Philippines
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bhoruka Overseas - Indonesia
- Gujarat Sidhee Cement - India
- Bulk Trading Sa - Switzerland
- Electricity Generating Authority of Thailand
- Grasim Industreis Ltd - India
- GVK Power & Infra Limited - India
- Metalloyd Limited - United Kingdom
- Port Waratah Coal Services - Australia
- Bhushan Steel Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Toyota Tsusho Corporation, Japan
- Holcim Trading Pte Ltd - Singapore
- Electricity Authority, New Zealand
- Sree Jayajothi Cements Limited - India
- Chettinad Cement Corporation Ltd - India
- SMC Global Power, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Therma Luzon, Inc, Philippines
- Eastern Coal Council - USA
- Indian Oil Corporation Limited
- Bayan Resources Tbk. - Indonesia
- Coalindo Energy - Indonesia
- Georgia Ports Authority, United States
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petron Corporation, Philippines
- Bhatia International Limited - India
- Borneo Indobara - Indonesia
- Manunggal Multi Energi - Indonesia
- IEA Clean Coal Centre - UK
- Malabar Cements Ltd - India
- Tata Chemicals Ltd - India
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- International Coal Ventures Pvt Ltd - India
- Pendopo Energi Batubara - Indonesia
- Parry Sugars Refinery, India
- Kapuas Tunggal Persada - Indonesia
- Dalmia Cement Bharat India
- Anglo American - United Kingdom
- ICICI Bank Limited - India
- AsiaOL BioFuels Corp., Philippines
- Jaiprakash Power Ventures ltd
- Lanco Infratech Ltd - India
- San Jose City I Power Corp, Philippines
- Coal and Oil Company - UAE
- McConnell Dowell - Australia
- Gujarat Electricity Regulatory Commission - India
- Rio Tinto Coal - Australia
- India Bulls Power Limited - India
- Independent Power Producers Association of India
- Sojitz Corporation - Japan
- Kaltim Prima Coal - Indonesia
- Straits Asia Resources Limited - Singapore
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Ind-Barath Power Infra Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- LBH Netherlands Bv - Netherlands
- Central Electricity Authority - India
- Indonesian Coal Mining Association
- Romanian Commodities Exchange
- Economic Council, Georgia
- Commonwealth Bank - Australia
- Baramulti Group, Indonesia
- South Luzon Thermal Energy Corporation
- Semirara Mining and Power Corporation, Philippines
- MS Steel International - UAE
- Planning Commission, India
- Ambuja Cements Ltd - India
- Minerals Council of Australia
- GMR Energy Limited - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Banpu Public Company Limited - Thailand
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Miang Besar Coal Terminal - Indonesia
- Indogreen Group - Indonesia
- Eastern Energy - Thailand
- Rashtriya Ispat Nigam Limited - India
- Salva Resources Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Vijayanagar Sugar Pvt Ltd - India
- Sakthi Sugars Limited - India
- Intertek Mineral Services - Indonesia
- Antam Resourcindo - Indonesia
- Australian Commodity Traders Exchange
- Timah Investasi Mineral - Indoneisa
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Siam City Cement - Thailand
- Xindia Steels Limited - India
- Simpson Spence & Young - Indonesia
- Indian Energy Exchange, India
- Videocon Industries ltd - India
- Global Coal Blending Company Limited - Australia
- Sindya Power Generating Company Private Ltd
- New Zealand Coal & Carbon
- Karaikal Port Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Renaissance Capital - South Africa
- Ceylon Electricity Board - Sri Lanka
- Kalimantan Lumbung Energi - Indonesia
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Neyveli Lignite Corporation Ltd, - India
- London Commodity Brokers - England
- Mjunction Services Limited - India
- CNBM International Corporation - China
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Bangladesh Power Developement Board
- Kumho Petrochemical, South Korea
- Oldendorff Carriers - Singapore
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Aditya Birla Group - India
- Barasentosa Lestari - Indonesia
- Goldman Sachs - Singapore
- Kepco SPC Power Corporation, Philippines
- Star Paper Mills Limited - India
- Siam City Cement PLC, Thailand
- Kohat Cement Company Ltd. - Pakistan
- Vedanta Resources Plc - India
- Samtan Co., Ltd - South Korea
- Heidelberg Cement - Germany
- The Treasury - Australian Government
- SN Aboitiz Power Inc, Philippines
- Uttam Galva Steels Limited - India
- Deloitte Consulting - India
- PTC India Limited - India
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Bharathi Cement Corporation - India
- The University of Queensland
- Directorate General of MIneral and Coal - Indonesia
- Tamil Nadu electricity Board
- Global Business Power Corporation, Philippines
- The State Trading Corporation of India Ltd
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