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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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Saturday, 23 July 22
STABILITY OF RUSSIAN GAS FLOWS REMAIN UNCERTAIN, DESPITE THE REOPENING OF NORD STREAM - WOOD MACKENZIE
Gazprom confirmed today that regular annual maintenance of Nord Stream is officially over and gas flows restarted at 63 million cubic metres per da ...
Friday, 22 July 22
MARKET INSIGHT - INTERMODAL
Faced with uncertainty regarding the most cost-efficient alternative fuels and the future dominant method to reduce their greenhouse emissions, man ...
Friday, 22 July 22
YANCOAL AUSTRALIA CUTS 2022 COAL OUTPUT VIEW AS FLOODS, COVID BITE - REUTERS
Coal miner Yancoal Australia Ltd YAL.AX cut its 2022 output forecast on Wednesday, signalling a hit from higher-than-expected rainfall, COVID-19-le ...
Wednesday, 20 July 22
BOOST FOR BIOFUELS AS IMO REMOVES REGULATORY HURDLE - GARD
MARPOL Annex VI regulations were written for petroleum derived fuels but also apply to biofuels. It has been a challenge to meet the regulatory req ...
Wednesday, 20 July 22
INDONESIA’S COAL EXPORTS TO THE EU INCREASED SIGNIFICANTLY RECENTLY
European countries have increased coal imports from Indonesia due to the energy crisis that hit the region after Russia cuts gas exports to Europe. ...
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- Bahari Cakrawala Sebuku - Indonesia
- Global Green Power PLC Corporation, Philippines
- The University of Queensland
- Altura Mining Limited, Indonesia
- Vizag Seaport Private Limited - India
- Bhushan Steel Limited - India
- Marubeni Corporation - India
- Billiton Holdings Pty Ltd - Australia
- Alfred C Toepfer International GmbH - Germany
- Kumho Petrochemical, South Korea
- Directorate Of Revenue Intelligence - India
- AsiaOL BioFuels Corp., Philippines
- Heidelberg Cement - Germany
- Latin American Coal - Colombia
- ASAPP Information Group - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Cement Manufacturers Association - India
- Mjunction Services Limited - India
- Uttam Galva Steels Limited - India
- IHS Mccloskey Coal Group - USA
- Jindal Steel & Power Ltd - India
- Attock Cement Pakistan Limited
- Sical Logistics Limited - India
- Kapuas Tunggal Persada - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Mercator Lines Limited - India
- Timah Investasi Mineral - Indoneisa
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Global Business Power Corporation, Philippines
- Larsen & Toubro Limited - India
- Meenaskhi Energy Private Limited - India
- Electricity Generating Authority of Thailand
- Energy Development Corp, Philippines
- Straits Asia Resources Limited - Singapore
- Indika Energy - Indonesia
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Mintek Dendrill Indonesia
- Ambuja Cements Ltd - India
- Bangladesh Power Developement Board
- Coalindo Energy - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Aboitiz Power Corporation - Philippines
- South Luzon Thermal Energy Corporation
- OPG Power Generation Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Indonesian Coal Mining Association
- Trasteel International SA, Italy
- SMG Consultants - Indonesia
- Jaiprakash Power Ventures ltd
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- Economic Council, Georgia
- PetroVietnam Power Coal Import and Supply Company
- Baramulti Group, Indonesia
- Australian Coal Association
- Antam Resourcindo - Indonesia
- New Zealand Coal & Carbon
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Grasim Industreis Ltd - India
- Australian Commodity Traders Exchange
- Star Paper Mills Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- CNBM International Corporation - China
- Xindia Steels Limited - India
- Lanco Infratech Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Eastern Energy - Thailand
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Power Finance Corporation Ltd., India
- SN Aboitiz Power Inc, Philippines
- PowerSource Philippines DevCo
- Salva Resources Pvt Ltd - India
- Formosa Plastics Group - Taiwan
- GVK Power & Infra Limited - India
- Parry Sugars Refinery, India
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sindya Power Generating Company Private Ltd
- Iligan Light & Power Inc, Philippines
- Energy Link Ltd, New Zealand
- Rashtriya Ispat Nigam Limited - India
- Mercuria Energy - Indonesia
- Port Waratah Coal Services - Australia
- Karaikal Port Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Thai Mozambique Logistica
- Price Waterhouse Coopers - Russia
- Miang Besar Coal Terminal - Indonesia
- Sakthi Sugars Limited - India
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Tamil Nadu electricity Board
- GMR Energy Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Africa Commodities Group - South Africa
- Dalmia Cement Bharat India
- Bulk Trading Sa - Switzerland
- Central Electricity Authority - India
- Interocean Group of Companies - India
- Ministry of Transport, Egypt
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- Romanian Commodities Exchange
- Aditya Birla Group - India
- Minerals Council of Australia
- Pendopo Energi Batubara - Indonesia
- The Treasury - Australian Government
- Gujarat Electricity Regulatory Commission - India
- Ministry of Finance - Indonesia
- Merrill Lynch Commodities Europe
- Simpson Spence & Young - Indonesia
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Binh Thuan Hamico - Vietnam
- White Energy Company Limited
- The State Trading Corporation of India Ltd
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Carbofer General Trading SA - India
- Georgia Ports Authority, United States
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Central Java Power - Indonesia
- Chamber of Mines of South Africa
- Bukit Baiduri Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Siam City Cement PLC, Thailand
- Sarangani Energy Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Anglo American - United Kingdom
- GN Power Mariveles Coal Plant, Philippines
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Indian Oil Corporation Limited
- Siam City Cement - Thailand
- Indogreen Group - Indonesia
- Sree Jayajothi Cements Limited - India
- Maheswari Brothers Coal Limited - India
- San Jose City I Power Corp, Philippines
- Deloitte Consulting - India
- Holcim Trading Pte Ltd - Singapore
- Agrawal Coal Company - India
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Kaltim Prima Coal - Indonesia
- Kartika Selabumi Mining - Indonesia
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- CIMB Investment Bank - Malaysia
- Edison Trading Spa - Italy
- Oldendorff Carriers - Singapore
- Bayan Resources Tbk. - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Planning Commission, India
- Kideco Jaya Agung - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- Directorate General of MIneral and Coal - Indonesia
- Meralco Power Generation, Philippines
- Bukit Makmur.PT - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Semirara Mining Corp, Philippines
- Orica Australia Pty. Ltd.
- McConnell Dowell - Australia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Wilmar Investment Holdings
- European Bulk Services B.V. - Netherlands
- Tata Chemicals Ltd - India
- Toyota Tsusho Corporation, Japan
- Kalimantan Lumbung Energi - Indonesia
- PNOC Exploration Corporation - Philippines
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Sinarmas Energy and Mining - Indonesia
- Metalloyd Limited - United Kingdom
- Independent Power Producers Association of India
- Petron Corporation, Philippines
- Videocon Industries ltd - India
- PTC India Limited - India
- Rio Tinto Coal - Australia
- TeaM Sual Corporation - Philippines
- Indian Energy Exchange, India
- Kohat Cement Company Ltd. - Pakistan
- Commonwealth Bank - Australia
- Essar Steel Hazira Ltd - India
- Thiess Contractors Indonesia
- Riau Bara Harum - Indonesia
- Borneo Indobara - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Eastern Coal Council - USA
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Bhatia International Limited - India
- Intertek Mineral Services - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Gujarat Sidhee Cement - India
- Indo Tambangraya Megah - Indonesia
- SMC Global Power, Philippines
- Orica Mining Services - Indonesia
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