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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, 04 November 21
FASTER DECARBONISATION: BACK TO BASICS FOR THE MINING INDUSTRY? - WOOD MACKENZIE
To the uninitiated, rugby is a technical and complicated game. As young schoolboys it was all a wee bit confusing and we invariably ended up on the ...
Wednesday, 03 November 21
CHINA TO LAUNCH NEW DATA MONITORING SYSTEM, TARGETING COAL MARKET SPECULATION, HOARDING - GLOBAL TIMES
China’s top economic planner announced on Sunday a new data system for supervising the implementation of medium- and long-term contracts of c ...
Wednesday, 03 November 21
CHINA’S STATE PLANNER SAYS COAL SUPPLY IMPROVING, PRICES STABILISING - REUTERS
China’s coal supply situation has seen significant improvement with joint efforts from coal producers, logistics and downstream users, while ...
Wednesday, 03 November 21
HIGHER COKING COAL PRICES TO PARE PROFITABILITY OF STEELMAKERS IN SECOND HALF OF FY22 - CRISIL RATINGS
The operating margin of primary steelmakers will reduce by a third to 24-26% in the second half of this fiscal versus the first half as input cost ...
Wednesday, 03 November 21
MARKET INSIGHT - INTERMODAL
November is here and soon the all time seasonal favorite “all I want or Christmas is you” by Mariah Carey will be played in radio stati ...
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- Karbindo Abesyapradhi - Indoneisa
- Coastal Gujarat Power Limited - India
- Ind-Barath Power Infra Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Thai Mozambique Logistica
- SMC Global Power, Philippines
- IEA Clean Coal Centre - UK
- Kalimantan Lumbung Energi - Indonesia
- Agrawal Coal Company - India
- Bhatia International Limited - India
- San Jose City I Power Corp, Philippines
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Kideco Jaya Agung - Indonesia
- Sical Logistics Limited - India
- Energy Development Corp, Philippines
- Energy Link Ltd, New Zealand
- Jaiprakash Power Ventures ltd
- Kapuas Tunggal Persada - Indonesia
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Gujarat Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Heidelberg Cement - Germany
- Baramulti Group, Indonesia
- Wilmar Investment Holdings
- Krishnapatnam Port Company Ltd. - India
- Bhushan Steel Limited - India
- Savvy Resources Ltd - HongKong
- Asmin Koalindo Tuhup - Indonesia
- Binh Thuan Hamico - Vietnam
- Petrochimia International Co. Ltd.- Taiwan
- Ceylon Electricity Board - Sri Lanka
- Carbofer General Trading SA - India
- GN Power Mariveles Coal Plant, Philippines
- TeaM Sual Corporation - Philippines
- Planning Commission, India
- Indika Energy - Indonesia
- Independent Power Producers Association of India
- Marubeni Corporation - India
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Goldman Sachs - Singapore
- International Coal Ventures Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Rio Tinto Coal - Australia
- Billiton Holdings Pty Ltd - Australia
- Siam City Cement - Thailand
- Oldendorff Carriers - Singapore
- Eastern Energy - Thailand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kaltim Prima Coal - Indonesia
- Global Coal Blending Company Limited - Australia
- OPG Power Generation Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- VISA Power Limited - India
- CIMB Investment Bank - Malaysia
- Straits Asia Resources Limited - Singapore
- New Zealand Coal & Carbon
- Borneo Indobara - Indonesia
- India Bulls Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Rashtriya Ispat Nigam Limited - India
- Electricity Authority, New Zealand
- Sindya Power Generating Company Private Ltd
- Globalindo Alam Lestari - Indonesia
- Meenaskhi Energy Private Limited - India
- Mjunction Services Limited - India
- Indo Tambangraya Megah - Indonesia
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Videocon Industries ltd - India
- Singapore Mercantile Exchange
- Bangladesh Power Developement Board
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Attock Cement Pakistan Limited
- Gujarat Mineral Development Corp Ltd - India
- Dalmia Cement Bharat India
- Indonesian Coal Mining Association
- Ambuja Cements Ltd - India
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- European Bulk Services B.V. - Netherlands
- London Commodity Brokers - England
- White Energy Company Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Banpu Public Company Limited - Thailand
- Power Finance Corporation Ltd., India
- Bhoruka Overseas - Indonesia
- The State Trading Corporation of India Ltd
- Ministry of Mines - Canada
- Bukit Makmur.PT - Indonesia
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Uttam Galva Steels Limited - India
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Global Business Power Corporation, Philippines
- Minerals Council of Australia
- Sree Jayajothi Cements Limited - India
- Trasteel International SA, Italy
- Aboitiz Power Corporation - Philippines
- Petron Corporation, Philippines
- Directorate General of MIneral and Coal - Indonesia
- CNBM International Corporation - China
- Electricity Generating Authority of Thailand
- Kobexindo Tractors - Indoneisa
- Leighton Contractors Pty Ltd - Australia
- Deloitte Consulting - India
- Orica Australia Pty. Ltd.
- Pendopo Energi Batubara - Indonesia
- Vedanta Resources Plc - India
- Chettinad Cement Corporation Ltd - India
- Makarim & Taira - Indonesia
- Wood Mackenzie - Singapore
- Cement Manufacturers Association - India
- Iligan Light & Power Inc, Philippines
- Central Java Power - Indonesia
- Renaissance Capital - South Africa
- Africa Commodities Group - South Africa
- Riau Bara Harum - Indonesia
- Chamber of Mines of South Africa
- Grasim Industreis Ltd - India
- Intertek Mineral Services - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Timah Investasi Mineral - Indoneisa
- Mintek Dendrill Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Australian Commodity Traders Exchange
- Jorong Barutama Greston.PT - Indonesia
- Tamil Nadu electricity Board
- Simpson Spence & Young - Indonesia
- Anglo American - United Kingdom
- Barasentosa Lestari - Indonesia
- Karaikal Port Pvt Ltd - India
- Semirara Mining Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Maheswari Brothers Coal Limited - India
- The University of Queensland
- TNB Fuel Sdn Bhd - Malaysia
- Orica Mining Services - Indonesia
- ASAPP Information Group - India
- Alfred C Toepfer International GmbH - Germany
- GVK Power & Infra Limited - India
- GMR Energy Limited - India
- Meralco Power Generation, Philippines
- Miang Besar Coal Terminal - Indonesia
- Price Waterhouse Coopers - Russia
- Bulk Trading Sa - Switzerland
- Sinarmas Energy and Mining - Indonesia
- Coalindo Energy - Indonesia
- Parliament of New Zealand
- Medco Energi Mining Internasional
- Latin American Coal - Colombia
- Indogreen Group - Indonesia
- Australian Coal Association
- Interocean Group of Companies - India
- Kepco SPC Power Corporation, Philippines
- Siam City Cement PLC, Thailand
- Indian Oil Corporation Limited
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Madhucon Powers Ltd - India
- Posco Energy - South Korea
- McConnell Dowell - Australia
- Thiess Contractors Indonesia
- Global Green Power PLC Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Malabar Cements Ltd - India
- Mercator Lines Limited - India
- Kumho Petrochemical, South Korea
- Commonwealth Bank - Australia
- Star Paper Mills Limited - India
- Larsen & Toubro Limited - India
- Essar Steel Hazira Ltd - India
- Salva Resources Pvt Ltd - India
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Bahari Cakrawala Sebuku - Indonesia
- Mercuria Energy - Indonesia
- Sarangani Energy Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- AsiaOL BioFuels Corp., Philippines
- Bayan Resources Tbk. - Indonesia
- The Treasury - Australian Government
- Ministry of Transport, Egypt
- Semirara Mining and Power Corporation, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Bharathi Cement Corporation - India
- Edison Trading Spa - Italy
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Lanco Infratech Ltd - India
- Port Waratah Coal Services - Australia
- Indian Energy Exchange, India
- IHS Mccloskey Coal Group - USA
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- ICICI Bank Limited - India
- Central Electricity Authority - India
- Romanian Commodities Exchange
- Standard Chartered Bank - UAE
- SN Aboitiz Power Inc, Philippines
- Formosa Plastics Group - Taiwan
- SMG Consultants - Indonesia
- Sojitz Corporation - Japan
- PNOC Exploration Corporation - Philippines
- Aditya Birla Group - India
- Coal and Oil Company - UAE
- Jindal Steel & Power Ltd - India
- Xindia Steels Limited - India
- Antam Resourcindo - Indonesia
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