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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
INVESTMENT IN GLOBAL COAL SUPPLY CHAIN TO HIT $115 BN IN 2022, LED BY CHINA AND INDIA - BUSINESS LINE
At over $80 billion, China and India are anticipated to make up the bulk of global coal investment in 2022, says IEA.
The investment ...
Wednesday, 29 June 22
LNG MARKET REMAINS TIGHT - INTERMODAL
LNG market remains tight currently, mainly driven by the US LNG outage from the recent fire in Freeport LNG terminal together with the recent fall ...
Wednesday, 29 June 22
CHINA'S NEW PLAN FOR RENEWABLE ENERGY DEVELOPMENT FOCUSES ON CONSUMPTION - FITCH RATINGS
China’s focus on consumption penetration for renewable energy development in its recently released 14th five-year plan – 2021 to 2025 & ...
Wednesday, 29 June 22
APAC CORPORATE SECTOR OUTLOOKS SHIFT AMID GLOBAL SHOCKS - FITCH RATINGS’
Fitch Ratings’ mid-2022 corporate sector outlook review revealed that the Asia-Pacific (APAC) region saw the largest number of sector outlook ...
Thursday, 16 June 22
MARKET INSIGHT - INTERMODAL
Picking up from my last insight in March, on the early days of the invasion, it's worth pointing out the way that the fast-paced working enviro ...
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- Australian Coal Association
- Rio Tinto Coal - Australia
- Vedanta Resources Plc - India
- Sindya Power Generating Company Private Ltd
- Grasim Industreis Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Oldendorff Carriers - Singapore
- Dalmia Cement Bharat India
- Bayan Resources Tbk. - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Coastal Gujarat Power Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Asam (Persero) Tbk - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Ministry of Mines - Canada
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Krishnapatnam Port Company Ltd. - India
- Karbindo Abesyapradhi - Indoneisa
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Global Green Power PLC Corporation, Philippines
- Central Electricity Authority - India
- Meralco Power Generation, Philippines
- Orica Australia Pty. Ltd.
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Planning Commission, India
- Interocean Group of Companies - India
- Gujarat Sidhee Cement - India
- Anglo American - United Kingdom
- PTC India Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Edison Trading Spa - Italy
- Petrochimia International Co. Ltd.- Taiwan
- South Luzon Thermal Energy Corporation
- Videocon Industries ltd - India
- Karaikal Port Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Thai Mozambique Logistica
- GVK Power & Infra Limited - India
- Borneo Indobara - Indonesia
- Bhatia International Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Vizag Seaport Private Limited - India
- Posco Energy - South Korea
- SMG Consultants - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Bulk Trading Sa - Switzerland
- Energy Development Corp, Philippines
- Toyota Tsusho Corporation, Japan
- ASAPP Information Group - India
- Star Paper Mills Limited - India
- Electricity Generating Authority of Thailand
- Singapore Mercantile Exchange
- Gujarat Electricity Regulatory Commission - India
- San Jose City I Power Corp, Philippines
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- Intertek Mineral Services - Indonesia
- Indian Oil Corporation Limited
- Minerals Council of Australia
- Vijayanagar Sugar Pvt Ltd - India
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Petron Corporation, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Maharashtra Electricity Regulatory Commission - India
- Indonesian Coal Mining Association
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- IHS Mccloskey Coal Group - USA
- Directorate Of Revenue Intelligence - India
- Manunggal Multi Energi - Indonesia
- Energy Link Ltd, New Zealand
- Trasteel International SA, Italy
- Bangladesh Power Developement Board
- Asia Pacific Energy Resources Ventures Inc, Philippines
- TeaM Sual Corporation - Philippines
- Tata Chemicals Ltd - India
- Wood Mackenzie - Singapore
- Samtan Co., Ltd - South Korea
- The State Trading Corporation of India Ltd
- Latin American Coal - Colombia
- Deloitte Consulting - India
- McConnell Dowell - Australia
- Indika Energy - Indonesia
- Indian Energy Exchange, India
- Power Finance Corporation Ltd., India
- AsiaOL BioFuels Corp., Philippines
- Romanian Commodities Exchange
- Coal and Oil Company - UAE
- Savvy Resources Ltd - HongKong
- PowerSource Philippines DevCo
- Maheswari Brothers Coal Limited - India
- Miang Besar Coal Terminal - Indonesia
- Neyveli Lignite Corporation Ltd, - India
- India Bulls Power Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Semirara Mining and Power Corporation, Philippines
- Port Waratah Coal Services - Australia
- Bhoruka Overseas - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Georgia Ports Authority, United States
- Bukit Baiduri Energy - Indonesia
- Antam Resourcindo - Indonesia
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Rashtriya Ispat Nigam Limited - India
- Chettinad Cement Corporation Ltd - India
- London Commodity Brokers - England
- Mercator Lines Limited - India
- Formosa Plastics Group - Taiwan
- Marubeni Corporation - India
- Agrawal Coal Company - India
- Kepco SPC Power Corporation, Philippines
- Banpu Public Company Limited - Thailand
- Sarangani Energy Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- Attock Cement Pakistan Limited
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Globalindo Alam Lestari - Indonesia
- CIMB Investment Bank - Malaysia
- Parry Sugars Refinery, India
- Aditya Birla Group - India
- Essar Steel Hazira Ltd - India
- Larsen & Toubro Limited - India
- Bukit Makmur.PT - Indonesia
- Salva Resources Pvt Ltd - India
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Bahari Cakrawala Sebuku - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Central Java Power - Indonesia
- Makarim & Taira - Indonesia
- OPG Power Generation Pvt Ltd - India
- MS Steel International - UAE
- Directorate General of MIneral and Coal - Indonesia
- Semirara Mining Corp, Philippines
- Straits Asia Resources Limited - Singapore
- LBH Netherlands Bv - Netherlands
- Kaltim Prima Coal - Indonesia
- Africa Commodities Group - South Africa
- Pipit Mutiara Jaya. PT, Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhushan Steel Limited - India
- Global Business Power Corporation, Philippines
- Eastern Energy - Thailand
- SN Aboitiz Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- Sojitz Corporation - Japan
- Aboitiz Power Corporation - Philippines
- White Energy Company Limited
- Sakthi Sugars Limited - India
- Independent Power Producers Association of India
- Binh Thuan Hamico - Vietnam
- Kumho Petrochemical, South Korea
- Goldman Sachs - Singapore
- Chamber of Mines of South Africa
- Siam City Cement - Thailand
- Mjunction Services Limited - India
- Sree Jayajothi Cements Limited - India
- Carbofer General Trading SA - India
- Eastern Coal Council - USA
- Ministry of Transport, Egypt
- CNBM International Corporation - China
- Ambuja Cements Ltd - India
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Parliament of New Zealand
- Economic Council, Georgia
- Simpson Spence & Young - Indonesia
- Baramulti Group, Indonesia
- Ministry of Finance - Indonesia
- Kartika Selabumi Mining - Indonesia
- IEA Clean Coal Centre - UK
- Indogreen Group - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Iligan Light & Power Inc, Philippines
- Malabar Cements Ltd - India
- Australian Commodity Traders Exchange
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- Mintek Dendrill Indonesia
- Bharathi Cement Corporation - India
- Thiess Contractors Indonesia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Electricity Authority, New Zealand
- The University of Queensland
- Medco Energi Mining Internasional
- GMR Energy Limited - India
- Coalindo Energy - Indonesia
- Madhucon Powers Ltd - India
- ICICI Bank Limited - India
- Barasentosa Lestari - Indonesia
- New Zealand Coal & Carbon
- VISA Power Limited - India
- Metalloyd Limited - United Kingdom
- The Treasury - Australian Government
- Therma Luzon, Inc, Philippines
- Jaiprakash Power Ventures ltd
- Mercuria Energy - Indonesia
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