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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, 19 July 22
DRY BULK MARKET: CAPESIZE MARKET FIRMS THIS WEEK - BALTIC EXCHANGE
Capesize
Firmer sentiment across both basins pushed the Capesize 5TC route average above the $20,000 threshold this week, closing at $24,209. A ...
Tuesday, 19 July 22
WHY SHIPPING MIGHT BE ABOUT TO GET A LITTLE BIT SLOWER - WORLD ECONOMIC FORUM
If shipping is the beating heart of global trade, its pulse is about to get slower.
Faced with uncertainty about which fuels to use in the long ...
Tuesday, 19 July 22
GERMANY'S INCREASED COAL, OIL USE WILL BE TEMPORARY, SCHOLZ SAYS - CNBC
Chancellor Olaf Scholz says Germany’s decision to reactivate coal and oil-fired power plants to relieve energy shortages because of the war i ...
Tuesday, 19 July 22
INDONESIA REMOVES PALM OIL EXPORT LEVY UNTIL AUG. 31 - REUTERS
Indonesia has scrapped its export levy for all palm oil products until Aug. 31 in a fresh attempt to boost exports and ease high inventories, finan ...
Tuesday, 19 July 22
CHINA'S JUNE DAILY COAL OUTPUT JUMPS ON PEAK SUMMER DEMAND - REUTERS
China’s daily coal output in June rose 6.6 per cent from a month earlier as miners cranked up output ahead of peak summer temperatures, when ...
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- Petron Corporation, Philippines
- Romanian Commodities Exchange
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- Madhucon Powers Ltd - India
- Antam Resourcindo - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Savvy Resources Ltd - HongKong
- SMC Global Power, Philippines
- Gujarat Sidhee Cement - India
- The University of Queensland
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Manunggal Multi Energi - Indonesia
- Ministry of Transport, Egypt
- Thai Mozambique Logistica
- TNB Fuel Sdn Bhd - Malaysia
- Indian Oil Corporation Limited
- Larsen & Toubro Limited - India
- Gujarat Mineral Development Corp Ltd - India
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Merrill Lynch Commodities Europe
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Bukit Asam (Persero) Tbk - Indonesia
- PowerSource Philippines DevCo
- Kapuas Tunggal Persada - Indonesia
- Grasim Industreis Ltd - India
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- South Luzon Thermal Energy Corporation
- Mjunction Services Limited - India
- Meenaskhi Energy Private Limited - India
- Cement Manufacturers Association - India
- Electricity Generating Authority of Thailand
- Baramulti Group, Indonesia
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- International Coal Ventures Pvt Ltd - India
- Africa Commodities Group - South Africa
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Riau Bara Harum - Indonesia
- IHS Mccloskey Coal Group - USA
- Commonwealth Bank - Australia
- Barasentosa Lestari - Indonesia
- Heidelberg Cement - Germany
- Siam City Cement PLC, Thailand
- Sindya Power Generating Company Private Ltd
- Kartika Selabumi Mining - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Intertek Mineral Services - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Parry Sugars Refinery, India
- Uttam Galva Steels Limited - India
- Krishnapatnam Port Company Ltd. - India
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Tata Chemicals Ltd - India
- Bharathi Cement Corporation - India
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- Kobexindo Tractors - Indoneisa
- Orica Mining Services - Indonesia
- Dalmia Cement Bharat India
- Rio Tinto Coal - Australia
- Rashtriya Ispat Nigam Limited - India
- Deloitte Consulting - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indo Tambangraya Megah - Indonesia
- Bhoruka Overseas - Indonesia
- Binh Thuan Hamico - Vietnam
- Wilmar Investment Holdings
- The Treasury - Australian Government
- MS Steel International - UAE
- Power Finance Corporation Ltd., India
- Karaikal Port Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Energy Development Corp, Philippines
- Essar Steel Hazira Ltd - India
- Ministry of Mines - Canada
- Indonesian Coal Mining Association
- Sarangani Energy Corporation, Philippines
- Semirara Mining and Power Corporation, Philippines
- Indian Energy Exchange, India
- Borneo Indobara - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Latin American Coal - Colombia
- Globalindo Alam Lestari - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Directorate Of Revenue Intelligence - India
- Singapore Mercantile Exchange
- SN Aboitiz Power Inc, Philippines
- OPG Power Generation Pvt Ltd - India
- Meralco Power Generation, Philippines
- Medco Energi Mining Internasional
- Ambuja Cements Ltd - India
- European Bulk Services B.V. - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Mercuria Energy - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Goldman Sachs - Singapore
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- PNOC Exploration Corporation - Philippines
- VISA Power Limited - India
- Australian Commodity Traders Exchange
- Sinarmas Energy and Mining - Indonesia
- The State Trading Corporation of India Ltd
- Indika Energy - Indonesia
- Orica Australia Pty. Ltd.
- Asmin Koalindo Tuhup - Indonesia
- Parliament of New Zealand
- ASAPP Information Group - India
- TeaM Sual Corporation - Philippines
- India Bulls Power Limited - India
- Sical Logistics Limited - India
- Bukit Makmur.PT - Indonesia
- Tamil Nadu electricity Board
- Cigading International Bulk Terminal - Indonesia
- Aditya Birla Group - India
- Bhatia International Limited - India
- Iligan Light & Power Inc, Philippines
- Bhushan Steel Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Independent Power Producers Association of India
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Georgia Ports Authority, United States
- Energy Link Ltd, New Zealand
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Bangladesh Power Developement Board
- Holcim Trading Pte Ltd - Singapore
- Global Coal Blending Company Limited - Australia
- Maheswari Brothers Coal Limited - India
- Therma Luzon, Inc, Philippines
- Bulk Trading Sa - Switzerland
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Coastal Gujarat Power Limited - India
- Chettinad Cement Corporation Ltd - India
- Xindia Steels Limited - India
- GAC Shipping (India) Pvt Ltd
- Directorate General of MIneral and Coal - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- GVK Power & Infra Limited - India
- Minerals Council of Australia
- Ceylon Electricity Board - Sri Lanka
- Eastern Energy - Thailand
- Posco Energy - South Korea
- Maharashtra Electricity Regulatory Commission - India
- Indogreen Group - Indonesia
- Planning Commission, India
- Interocean Group of Companies - India
- Kaltim Prima Coal - Indonesia
- Port Waratah Coal Services - Australia
- Eastern Coal Council - USA
- Central Java Power - Indonesia
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Malabar Cements Ltd - India
- Wood Mackenzie - Singapore
- Siam City Cement - Thailand
- SMG Consultants - Indonesia
- Bukit Baiduri Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Trasteel International SA, Italy
- Ind-Barath Power Infra Limited - India
- Altura Mining Limited, Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Mintek Dendrill Indonesia
- Anglo American - United Kingdom
- San Jose City I Power Corp, Philippines
- Attock Cement Pakistan Limited
- Chamber of Mines of South Africa
- Renaissance Capital - South Africa
- Economic Council, Georgia
- Samtan Co., Ltd - South Korea
- London Commodity Brokers - England
- LBH Netherlands Bv - Netherlands
- Kideco Jaya Agung - Indonesia
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- PTC India Limited - India
- Oldendorff Carriers - Singapore
- Formosa Plastics Group - Taiwan
- Salva Resources Pvt Ltd - India
- Central Electricity Authority - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Carbofer General Trading SA - India
- Ministry of Finance - Indonesia
- Jindal Steel & Power Ltd - India
- Kepco SPC Power Corporation, Philippines
- Sree Jayajothi Cements Limited - India
- IEA Clean Coal Centre - UK
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- CIMB Investment Bank - Malaysia
- White Energy Company Limited
- Star Paper Mills Limited - India
- Global Green Power PLC Corporation, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Videocon Industries ltd - India
- Agrawal Coal Company - India
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