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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, 29 May 15
SOUTH KOREAN STATE-OWNED UTILITY KOREA MIDLAND POWER INVITES BIDS FOR 780K MT OF COAL FOR H2' 15
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender to buy total 780K Metric Tons (MT) of HCV and LCV ...
Thursday, 28 May 15
TIMEBAR FOR DEMURRAGE CLAIMS - SKULD
KNOWLEDGE TO ELEVATE
English law has traditionally had a strict approach to contractually agreed time bars between commercial parties as well ...
Wednesday, 27 May 15
MARKET INSIGHT - TIMOS PAPADIMITRIOU
Earlier in the year I looked at how the market was reacting to the prolonged fall of the price of oil. Back then it was still unclear if the fallin ...
Tuesday, 26 May 15
HOW HAS THE DROP IN OIL PRICES AFFECTED OTHER COMMODITIES? - CLYDE & CO
KNOWLEDGE TO ELEVATE
The effects of the dramatic drop in the price of both Ice March Brent, the international oil marker, and its US counterpa ...
Tuesday, 26 May 15
MINING ASSOCIATION PERHAPI PUSHES FOR 35,000 MEGAWATT ELECTRICITY PROGRAM - JG
The Indonesian Mining Professionals Association, or Perhapi, has announced its support for a 35,000-megawatt national electricity program, saying i ...
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- Global Business Power Corporation, Philippines
- Formosa Plastics Group - Taiwan
- Georgia Ports Authority, United States
- Samtan Co., Ltd - South Korea
- Salva Resources Pvt Ltd - India
- Wilmar Investment Holdings
- Carbofer General Trading SA - India
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Karbindo Abesyapradhi - Indoneisa
- Binh Thuan Hamico - Vietnam
- Sinarmas Energy and Mining - Indonesia
- Maheswari Brothers Coal Limited - India
- Indika Energy - Indonesia
- Ind-Barath Power Infra Limited - India
- Sindya Power Generating Company Private Ltd
- Indonesian Coal Mining Association
- Bukit Asam (Persero) Tbk - Indonesia
- Eastern Energy - Thailand
- SMG Consultants - Indonesia
- Mintek Dendrill Indonesia
- MS Steel International - UAE
- Xindia Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Price Waterhouse Coopers - Russia
- Alfred C Toepfer International GmbH - Germany
- Sojitz Corporation - Japan
- Simpson Spence & Young - Indonesia
- The Treasury - Australian Government
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Altura Mining Limited, Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bukit Baiduri Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Barasentosa Lestari - Indonesia
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Intertek Mineral Services - Indonesia
- Sree Jayajothi Cements Limited - India
- Gujarat Mineral Development Corp Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- India Bulls Power Limited - India
- Petron Corporation, Philippines
- Cigading International Bulk Terminal - Indonesia
- Energy Development Corp, Philippines
- OPG Power Generation Pvt Ltd - India
- Riau Bara Harum - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Australian Commodity Traders Exchange
- VISA Power Limited - India
- Meenaskhi Energy Private Limited - India
- Sakthi Sugars Limited - India
- Standard Chartered Bank - UAE
- Rio Tinto Coal - Australia
- Vizag Seaport Private Limited - India
- Asmin Koalindo Tuhup - Indonesia
- Mercator Lines Limited - India
- Kobexindo Tractors - Indoneisa
- Kartika Selabumi Mining - Indonesia
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- Karaikal Port Pvt Ltd - India
- TeaM Sual Corporation - Philippines
- Siam City Cement - Thailand
- Meralco Power Generation, Philippines
- LBH Netherlands Bv - Netherlands
- Parry Sugars Refinery, India
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- AsiaOL BioFuels Corp., Philippines
- Leighton Contractors Pty Ltd - Australia
- GAC Shipping (India) Pvt Ltd
- Latin American Coal - Colombia
- Therma Luzon, Inc, Philippines
- IEA Clean Coal Centre - UK
- Larsen & Toubro Limited - India
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- McConnell Dowell - Australia
- Merrill Lynch Commodities Europe
- Indian Energy Exchange, India
- Metalloyd Limited - United Kingdom
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Economic Council, Georgia
- Kideco Jaya Agung - Indonesia
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Planning Commission, India
- Savvy Resources Ltd - HongKong
- Ministry of Finance - Indonesia
- Mercuria Energy - Indonesia
- Semirara Mining and Power Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- ICICI Bank Limited - India
- Central Java Power - Indonesia
- GMR Energy Limited - India
- Bhoruka Overseas - Indonesia
- Romanian Commodities Exchange
- White Energy Company Limited
- Bangladesh Power Developement Board
- Gujarat Electricity Regulatory Commission - India
- Oldendorff Carriers - Singapore
- Chamber of Mines of South Africa
- Bhushan Steel Limited - India
- Coal and Oil Company - UAE
- Minerals Council of Australia
- Bulk Trading Sa - Switzerland
- Bayan Resources Tbk. - Indonesia
- Pendopo Energi Batubara - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Port Waratah Coal Services - Australia
- ASAPP Information Group - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Bank of Tokyo Mitsubishi UFJ Ltd
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Mines - Canada
- Directorate Of Revenue Intelligence - India
- PetroVietnam Power Coal Import and Supply Company
- Borneo Indobara - Indonesia
- SN Aboitiz Power Inc, Philippines
- Central Electricity Authority - India
- Anglo American - United Kingdom
- Interocean Group of Companies - India
- Globalindo Alam Lestari - Indonesia
- Edison Trading Spa - Italy
- Energy Link Ltd, New Zealand
- Eastern Coal Council - USA
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Renaissance Capital - South Africa
- Bhatia International Limited - India
- Wood Mackenzie - Singapore
- Videocon Industries ltd - India
- Orica Australia Pty. Ltd.
- Vedanta Resources Plc - India
- GN Power Mariveles Coal Plant, Philippines
- Timah Investasi Mineral - Indoneisa
- Straits Asia Resources Limited - Singapore
- Electricity Authority, New Zealand
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Coalindo Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- SMC Global Power, Philippines
- Jaiprakash Power Ventures ltd
- Singapore Mercantile Exchange
- Iligan Light & Power Inc, Philippines
- Thiess Contractors Indonesia
- Aboitiz Power Corporation - Philippines
- PowerSource Philippines DevCo
- IHS Mccloskey Coal Group - USA
- Global Coal Blending Company Limited - Australia
- Petrochimia International Co. Ltd.- Taiwan
- CNBM International Corporation - China
- Independent Power Producers Association of India
- Maharashtra Electricity Regulatory Commission - India
- Dalmia Cement Bharat India
- Miang Besar Coal Terminal - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Deloitte Consulting - India
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- San Jose City I Power Corp, Philippines
- Australian Coal Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Grasim Industreis Ltd - India
- Sical Logistics Limited - India
- Sarangani Energy Corporation, Philippines
- Indogreen Group - Indonesia
- PNOC Exploration Corporation - Philippines
- Mjunction Services Limited - India
- London Commodity Brokers - England
- Antam Resourcindo - Indonesia
- Uttam Galva Steels Limited - India
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Heidelberg Cement - Germany
- Kumho Petrochemical, South Korea
- Chettinad Cement Corporation Ltd - India
- Ministry of Transport, Egypt
- Star Paper Mills Limited - India
- Madhucon Powers Ltd - India
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Toyota Tsusho Corporation, Japan
- Lanco Infratech Ltd - India
- Essar Steel Hazira Ltd - India
- Commonwealth Bank - Australia
- PTC India Limited - India
- Aditya Birla Group - India
- Makarim & Taira - Indonesia
- The State Trading Corporation of India Ltd
- New Zealand Coal & Carbon
- Coastal Gujarat Power Limited - India
- Africa Commodities Group - South Africa
- Siam City Cement PLC, Thailand
- Ambuja Cements Ltd - India
- Baramulti Group, Indonesia
- Krishnapatnam Port Company Ltd. - India
- Agrawal Coal Company - India
- Cement Manufacturers Association - India
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- The University of Queensland
- Vijayanagar Sugar Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
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