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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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Thursday, 30 June 22
FINANCIAL GAINS SUPPORT COAL TRANSITION - BALTIC EXCHANGE
Support for the shift away from coal dependency continues to mount, with the International Monetary Fund (IMF) calculating that the move would gene ...
Thursday, 30 June 22
WHY ARE LNG SHIPPING STOCKS RESILIENT? - DREWRY
LNG shipping stocks are proving resilient despite uncertainties about growth in global GDP, high inflation and the ongoing geopolitical crisis caus ...
Thursday, 30 June 22
SPOT AUSTRALIAN THERMAL COAL HAS SURGED, BUT CONTRACT PRICE IS KEY - REUTERS
The spot price of Australian thermal coal is higher than that of coking coal, an unprecedented situation that highlights just how the global market ...
Thursday, 30 June 22
SHANXI PROVINCE RAISES ANNUAL COAL OUTPUT TO 1.3 BILLION TONS TO ENSURE CHINA’S ENERGY SUPPLY - GLOBAL TIMES
North China’s Shanxi Province, a major coal-producing region, recently announced a move to increase its annual coal production output by 107 ...
Thursday, 30 June 22
DIVERGENCE BETWEEN HIGH- AND LOW-GRADE THERMAL COAL PRICES IN APAC TO NARROW - FITCH RATINGS
Prices between high- and low-grade thermal coal in Asia-Pacific (APAC) have diverged since late March 2022, but Fitch Ratings expects the gap to na ...
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- Merrill Lynch Commodities Europe
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Wilmar Investment Holdings
- Global Business Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- SMG Consultants - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Altura Mining Limited, Indonesia
- Romanian Commodities Exchange
- Sree Jayajothi Cements Limited - India
- Iligan Light & Power Inc, Philippines
- Jaiprakash Power Ventures ltd
- Eastern Coal Council - USA
- Dalmia Cement Bharat India
- Independent Power Producers Association of India
- Riau Bara Harum - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Bhushan Steel Limited - India
- Indian Oil Corporation Limited
- Aditya Birla Group - India
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Central Electricity Authority - India
- Indika Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Posco Energy - South Korea
- Bharathi Cement Corporation - India
- Energy Link Ltd, New Zealand
- Heidelberg Cement - Germany
- Thai Mozambique Logistica
- Carbofer General Trading SA - India
- Kohat Cement Company Ltd. - Pakistan
- Madhucon Powers Ltd - India
- International Coal Ventures Pvt Ltd - India
- Bhoruka Overseas - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Renaissance Capital - South Africa
- Orica Australia Pty. Ltd.
- Singapore Mercantile Exchange
- Georgia Ports Authority, United States
- Bangladesh Power Developement Board
- Alfred C Toepfer International GmbH - Germany
- Directorate Of Revenue Intelligence - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- San Jose City I Power Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Simpson Spence & Young - Indonesia
- Maheswari Brothers Coal Limited - India
- Jorong Barutama Greston.PT - Indonesia
- Sindya Power Generating Company Private Ltd
- Meenaskhi Energy Private Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- The University of Queensland
- Binh Thuan Hamico - Vietnam
- Bukit Asam (Persero) Tbk - Indonesia
- Kaltim Prima Coal - Indonesia
- Kobexindo Tractors - Indoneisa
- Gujarat Sidhee Cement - India
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Marubeni Corporation - India
- Ministry of Transport, Egypt
- Pendopo Energi Batubara - Indonesia
- Bhatia International Limited - India
- Australian Commodity Traders Exchange
- Eastern Energy - Thailand
- Tata Chemicals Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- GVK Power & Infra Limited - India
- Cigading International Bulk Terminal - Indonesia
- Africa Commodities Group - South Africa
- Central Java Power - Indonesia
- Kideco Jaya Agung - Indonesia
- PTC India Limited - India
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- Kumho Petrochemical, South Korea
- Antam Resourcindo - Indonesia
- Essar Steel Hazira Ltd - India
- Price Waterhouse Coopers - Russia
- Deloitte Consulting - India
- Samtan Co., Ltd - South Korea
- IHS Mccloskey Coal Group - USA
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- Ministry of Mines - Canada
- Sinarmas Energy and Mining - Indonesia
- Oldendorff Carriers - Singapore
- PNOC Exploration Corporation - Philippines
- Intertek Mineral Services - Indonesia
- Indogreen Group - Indonesia
- Power Finance Corporation Ltd., India
- White Energy Company Limited
- Thiess Contractors Indonesia
- Edison Trading Spa - Italy
- Mjunction Services Limited - India
- ICICI Bank Limited - India
- Australian Coal Association
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kapuas Tunggal Persada - Indonesia
- Makarim & Taira - Indonesia
- ASAPP Information Group - India
- Vijayanagar Sugar Pvt Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Siam City Cement - Thailand
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- VISA Power Limited - India
- Borneo Indobara - Indonesia
- Coal and Oil Company - UAE
- Port Waratah Coal Services - Australia
- Cement Manufacturers Association - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Sarangani Energy Corporation, Philippines
- Therma Luzon, Inc, Philippines
- Ceylon Electricity Board - Sri Lanka
- Agrawal Coal Company - India
- Globalindo Alam Lestari - Indonesia
- Mercator Lines Limited - India
- The State Trading Corporation of India Ltd
- Formosa Plastics Group - Taiwan
- Asmin Koalindo Tuhup - Indonesia
- Interocean Group of Companies - India
- Directorate General of MIneral and Coal - Indonesia
- SN Aboitiz Power Inc, Philippines
- Ministry of Finance - Indonesia
- Mintek Dendrill Indonesia
- Bayan Resources Tbk. - Indonesia
- Baramulti Group, Indonesia
- Karaikal Port Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Attock Cement Pakistan Limited
- India Bulls Power Limited - India
- Medco Energi Mining Internasional
- Krishnapatnam Port Company Ltd. - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- AsiaOL BioFuels Corp., Philippines
- Chettinad Cement Corporation Ltd - India
- McConnell Dowell - Australia
- GAC Shipping (India) Pvt Ltd
- GMR Energy Limited - India
- Vizag Seaport Private Limited - India
- Timah Investasi Mineral - Indoneisa
- CNBM International Corporation - China
- Minerals Council of Australia
- Savvy Resources Ltd - HongKong
- Ambuja Cements Ltd - India
- New Zealand Coal & Carbon
- Uttam Galva Steels Limited - India
- Malabar Cements Ltd - India
- OPG Power Generation Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Rio Tinto Coal - Australia
- London Commodity Brokers - England
- Billiton Holdings Pty Ltd - Australia
- Petron Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Sical Logistics Limited - India
- Kartika Selabumi Mining - Indonesia
- Coalindo Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Global Coal Blending Company Limited - Australia
- Metalloyd Limited - United Kingdom
- Orica Mining Services - Indonesia
- Jindal Steel & Power Ltd - India
- Standard Chartered Bank - UAE
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Indonesian Coal Mining Association
- Energy Development Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Vedanta Resources Plc - India
- MS Steel International - UAE
- Goldman Sachs - Singapore
- Manunggal Multi Energi - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Bulk Trading Sa - Switzerland
- PetroVietnam Power Coal Import and Supply Company
- Planning Commission, India
- Anglo American - United Kingdom
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- CIMB Investment Bank - Malaysia
- Salva Resources Pvt Ltd - India
- Xindia Steels Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- Meralco Power Generation, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Bank of Tokyo Mitsubishi UFJ Ltd
- Tamil Nadu electricity Board
- Indo Tambangraya Megah - Indonesia
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Economic Council, Georgia
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Ind-Barath Power Infra Limited - India
- Semirara Mining and Power Corporation, Philippines
- Commonwealth Bank - Australia
- Wood Mackenzie - Singapore
- Lanco Infratech Ltd - India
- South Luzon Thermal Energy Corporation
- Parry Sugars Refinery, India
- Videocon Industries ltd - India
- Parliament of New Zealand
- Trasteel International SA, Italy
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