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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, 04 February 22
RENEWABLES ON THE RISE, COAL CONTINUOUSLY FALLING - EUROPEAN COMMISSION
Although oil (34.5%) and natural gas (23.7%) were still the most important fuel sources in the EU energy mix in 2020, renewable energy’s shar ...
Thursday, 03 February 22
COAL SHORTAGE NOW AT ALARMING LEVELS, SAY ALUMINIUM PRODUCERS - IANS
With no relief in sight despite coal stocks running critically low and production disruptions looming across the Indian aluminium sector, the Alumi ...
Wednesday, 02 February 22
HIGH COKING COAL PRICES PROVIDE GLIMPSE INTO STEELMAKING'S FUTURE - MCKINSEY
Last year was a volatile one in global commodity markets. Demand for coking coal, an essential raw material in the production of steel, was extreme ...
Wednesday, 02 February 22
INDONESIA'S RESTRICTIONS ON COMMODITIES RATTLE MARKETS, MORE MOVES LIKELY - REUTERS
In just the first month of this year, Indonesian policymakers have rattled global markets with restrictions on some of its biggest commodities expo ...
Wednesday, 02 February 22
CHINA'S TOP COAL PRODUCER FORECASTS 28 PCT PROFIT GROWTH IN 2021 - XINHUA
China Shenhua Energy Company Limited, one of the country’s biggest coal producers, said its net profits are expected to jump by 28 percent in ...
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- Riau Bara Harum - Indonesia
- Indo Tambangraya Megah - Indonesia
- Therma Luzon, Inc, Philippines
- Sree Jayajothi Cements Limited - India
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Romanian Commodities Exchange
- Kumho Petrochemical, South Korea
- Planning Commission, India
- IHS Mccloskey Coal Group - USA
- Jaiprakash Power Ventures ltd
- McConnell Dowell - Australia
- Bukit Asam (Persero) Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- Parry Sugars Refinery, India
- London Commodity Brokers - England
- The Treasury - Australian Government
- Formosa Plastics Group - Taiwan
- Indian Energy Exchange, India
- Minerals Council of Australia
- Jorong Barutama Greston.PT - Indonesia
- OPG Power Generation Pvt Ltd - India
- Indogreen Group - Indonesia
- Indian Oil Corporation Limited
- Electricity Authority, New Zealand
- Baramulti Group, Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Anglo American - United Kingdom
- Chamber of Mines of South Africa
- Merrill Lynch Commodities Europe
- Eastern Coal Council - USA
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Malabar Cements Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Bhatia International Limited - India
- Kideco Jaya Agung - Indonesia
- Renaissance Capital - South Africa
- Bahari Cakrawala Sebuku - Indonesia
- Vizag Seaport Private Limited - India
- Ministry of Transport, Egypt
- Sarangani Energy Corporation, Philippines
- PNOC Exploration Corporation - Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Sinarmas Energy and Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- European Bulk Services B.V. - Netherlands
- Energy Development Corp, Philippines
- Gujarat Electricity Regulatory Commission - India
- Lanco Infratech Ltd - India
- SN Aboitiz Power Inc, Philippines
- Altura Mining Limited, Indonesia
- Indika Energy - Indonesia
- India Bulls Power Limited - India
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Edison Trading Spa - Italy
- Aditya Birla Group - India
- Semirara Mining Corp, Philippines
- Ministry of Finance - Indonesia
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- LBH Netherlands Bv - Netherlands
- Latin American Coal - Colombia
- Sojitz Corporation - Japan
- San Jose City I Power Corp, Philippines
- The State Trading Corporation of India Ltd
- Jindal Steel & Power Ltd - India
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- GAC Shipping (India) Pvt Ltd
- Standard Chartered Bank - UAE
- Sindya Power Generating Company Private Ltd
- Bangladesh Power Developement Board
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Goldman Sachs - Singapore
- Kartika Selabumi Mining - Indonesia
- Mercuria Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Commonwealth Bank - Australia
- Directorate Of Revenue Intelligence - India
- Salva Resources Pvt Ltd - India
- Attock Cement Pakistan Limited
- Gujarat Sidhee Cement - India
- Maheswari Brothers Coal Limited - India
- Port Waratah Coal Services - Australia
- Leighton Contractors Pty Ltd - Australia
- Larsen & Toubro Limited - India
- Singapore Mercantile Exchange
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- SMG Consultants - Indonesia
- Price Waterhouse Coopers - Russia
- Manunggal Multi Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Borneo Indobara - Indonesia
- Ambuja Cements Ltd - India
- Rio Tinto Coal - Australia
- SMC Global Power, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Cigading International Bulk Terminal - Indonesia
- Australian Commodity Traders Exchange
- Miang Besar Coal Terminal - Indonesia
- Deloitte Consulting - India
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Billiton Holdings Pty Ltd - Australia
- Georgia Ports Authority, United States
- AsiaOL BioFuels Corp., Philippines
- IEA Clean Coal Centre - UK
- Africa Commodities Group - South Africa
- Asmin Koalindo Tuhup - Indonesia
- Posco Energy - South Korea
- Banpu Public Company Limited - Thailand
- Global Green Power PLC Corporation, Philippines
- Pipit Mutiara Jaya. PT, Indonesia
- Antam Resourcindo - Indonesia
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Coalindo Energy - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Vijayanagar Sugar Pvt Ltd - India
- Meralco Power Generation, Philippines
- Ministry of Mines - Canada
- Agrawal Coal Company - India
- The University of Queensland
- Mercator Lines Limited - India
- Siam City Cement - Thailand
- Tamil Nadu electricity Board
- Bank of Tokyo Mitsubishi UFJ Ltd
- Maharashtra Electricity Regulatory Commission - India
- Simpson Spence & Young - Indonesia
- Samtan Co., Ltd - South Korea
- Tata Chemicals Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Aboitiz Power Corporation - Philippines
- Thiess Contractors Indonesia
- Orica Australia Pty. Ltd.
- Madhucon Powers Ltd - India
- Uttam Galva Steels Limited - India
- Global Coal Blending Company Limited - Australia
- Cement Manufacturers Association - India
- Intertek Mineral Services - Indonesia
- New Zealand Coal & Carbon
- Makarim & Taira - Indonesia
- Essar Steel Hazira Ltd - India
- Central Java Power - Indonesia
- Dalmia Cement Bharat India
- Energy Link Ltd, New Zealand
- Economic Council, Georgia
- Mjunction Services Limited - India
- Wood Mackenzie - Singapore
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- MS Steel International - UAE
- Marubeni Corporation - India
- Semirara Mining and Power Corporation, Philippines
- Australian Coal Association
- Metalloyd Limited - United Kingdom
- South Luzon Thermal Energy Corporation
- Savvy Resources Ltd - HongKong
- Videocon Industries ltd - India
- Star Paper Mills Limited - India
- Bukit Baiduri Energy - Indonesia
- Kepco SPC Power Corporation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Toyota Tsusho Corporation, Japan
- GN Power Mariveles Coal Plant, Philippines
- Parliament of New Zealand
- Bhushan Steel Limited - India
- Chettinad Cement Corporation Ltd - India
- CNBM International Corporation - China
- Ceylon Electricity Board - Sri Lanka
- GVK Power & Infra Limited - India
- Petron Corporation, Philippines
- CIMB Investment Bank - Malaysia
- Global Business Power Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Bhoruka Overseas - Indonesia
- GMR Energy Limited - India
- Interocean Group of Companies - India
- Bulk Trading Sa - Switzerland
- Ind-Barath Power Infra Limited - India
- Medco Energi Mining Internasional
- Orica Mining Services - Indonesia
- Sical Logistics Limited - India
- PowerSource Philippines DevCo
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Iligan Light & Power Inc, Philippines
- VISA Power Limited - India
- Straits Asia Resources Limited - Singapore
- Binh Thuan Hamico - Vietnam
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Trasteel International SA, Italy
- Pendopo Energi Batubara - Indonesia
- Siam City Cement PLC, Thailand
- ICICI Bank Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Carbofer General Trading SA - India
- PTC India Limited - India
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- Barasentosa Lestari - Indonesia
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