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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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Wednesday, 13 October 21
MARKET INSIGHT - INTERMODAL
Following up on our insight on May 2021, where we discussed about the Capesize market outlook for the second half of the year, we are pleased to se ...
Wednesday, 13 October 21
FBX INDEX: THE IMPOSSIBILITY OF SHORT-TERM FORECASTING - LARS JENSEN
Will freight rates on Asia-Europe or the Transpacific reach 40.000 USD/FFE in the run-up prior to Chinese New Year 2022? Or will they start droppin ...
Wednesday, 13 October 21
CHINA FLOODS: COAL PRICE HITS FRESH HIGH AS MINES SHUT - BBC
The price of coal used in China’s power plants has surged to a new record high as another of the country’s key mining regions is hit by ...
Tuesday, 12 October 21
BUMA SIGNS CONDITIONAL AGREEMENT FOR AUSTRALIAN ASSET ACQUISITION
PT Tbk. announced that its subsidiary, PT Bukit Makmur Mandiri Utama, through its newly incorporated Australian subsidiary, BUMA International Pty ...
Tuesday, 12 October 21
INDONESIA'S COAL-BASED POWER PLANTS ARE SUBJECT TO CARBON TAX NEXT YEAR, ELECTRICITY COSTS COULD RISE! - CNBC
The Indonesian government is planning plans to implement a carbon tax of IDR 30 per kilogram (kg) of carbon dioxide equivalent (CO2e) or equivalent ...
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- Videocon Industries ltd - India
- Economic Council, Georgia
- Energy Link Ltd, New Zealand
- Karaikal Port Pvt Ltd - India
- Thai Mozambique Logistica
- Ceylon Electricity Board - Sri Lanka
- GN Power Mariveles Coal Plant, Philippines
- Bhushan Steel Limited - India
- Billiton Holdings Pty Ltd - Australia
- Jorong Barutama Greston.PT - Indonesia
- Siam City Cement - Thailand
- Kobexindo Tractors - Indoneisa
- Offshore Bulk Terminal Pte Ltd, Singapore
- Ministry of Finance - Indonesia
- Samtan Co., Ltd - South Korea
- Makarim & Taira - Indonesia
- Posco Energy - South Korea
- Meralco Power Generation, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate Of Revenue Intelligence - India
- Holcim Trading Pte Ltd - Singapore
- Renaissance Capital - South Africa
- Kaltim Prima Coal - Indonesia
- Singapore Mercantile Exchange
- Standard Chartered Bank - UAE
- Bhoruka Overseas - Indonesia
- Manunggal Multi Energi - Indonesia
- Xindia Steels Limited - India
- PNOC Exploration Corporation - Philippines
- Thiess Contractors Indonesia
- Formosa Plastics Group - Taiwan
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- ASAPP Information Group - India
- IEA Clean Coal Centre - UK
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Commonwealth Bank - Australia
- Iligan Light & Power Inc, Philippines
- Ind-Barath Power Infra Limited - India
- ICICI Bank Limited - India
- Leighton Contractors Pty Ltd - Australia
- Bhatia International Limited - India
- LBH Netherlands Bv - Netherlands
- Petrochimia International Co. Ltd.- Taiwan
- PTC India Limited - India
- Africa Commodities Group - South Africa
- India Bulls Power Limited - India
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- Cigading International Bulk Terminal - Indonesia
- IHS Mccloskey Coal Group - USA
- Trasteel International SA, Italy
- Parliament of New Zealand
- Grasim Industreis Ltd - India
- Sakthi Sugars Limited - India
- Altura Mining Limited, Indonesia
- Kartika Selabumi Mining - Indonesia
- European Bulk Services B.V. - Netherlands
- Madhucon Powers Ltd - India
- Petron Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- Larsen & Toubro Limited - India
- Siam City Cement PLC, Thailand
- Carbofer General Trading SA - India
- Bulk Trading Sa - Switzerland
- Electricity Authority, New Zealand
- Global Coal Blending Company Limited - Australia
- Therma Luzon, Inc, Philippines
- Interocean Group of Companies - India
- Bahari Cakrawala Sebuku - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Indian Energy Exchange, India
- Wood Mackenzie - Singapore
- Riau Bara Harum - Indonesia
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Indika Energy - Indonesia
- Minerals Council of Australia
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Kumho Petrochemical, South Korea
- CNBM International Corporation - China
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- San Jose City I Power Corp, Philippines
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Bayan Resources Tbk. - Indonesia
- Sical Logistics Limited - India
- Ministry of Transport, Egypt
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Savvy Resources Ltd - HongKong
- London Commodity Brokers - England
- Krishnapatnam Port Company Ltd. - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- Tamil Nadu electricity Board
- OPG Power Generation Pvt Ltd - India
- Kohat Cement Company Ltd. - Pakistan
- TNB Fuel Sdn Bhd - Malaysia
- The Treasury - Australian Government
- Bangladesh Power Developement Board
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Neyveli Lignite Corporation Ltd, - India
- Eastern Energy - Thailand
- Electricity Generating Authority of Thailand
- Price Waterhouse Coopers - Russia
- Maharashtra Electricity Regulatory Commission - India
- Sindya Power Generating Company Private Ltd
- Bukit Makmur.PT - Indonesia
- Central Java Power - Indonesia
- TeaM Sual Corporation - Philippines
- Jindal Steel & Power Ltd - India
- Meenaskhi Energy Private Limited - India
- Tata Chemicals Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Vedanta Resources Plc - India
- Globalindo Alam Lestari - Indonesia
- New Zealand Coal & Carbon
- Ambuja Cements Ltd - India
- Jaiprakash Power Ventures ltd
- Power Finance Corporation Ltd., India
- Intertek Mineral Services - Indonesia
- Uttam Galva Steels Limited - India
- Ministry of Mines - Canada
- GAC Shipping (India) Pvt Ltd
- Dalmia Cement Bharat India
- Mercator Lines Limited - India
- Antam Resourcindo - Indonesia
- Timah Investasi Mineral - Indoneisa
- Indo Tambangraya Megah - Indonesia
- Central Electricity Authority - India
- Indogreen Group - Indonesia
- Gujarat Sidhee Cement - India
- Asmin Koalindo Tuhup - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Chettinad Cement Corporation Ltd - India
- Sree Jayajothi Cements Limited - India
- Georgia Ports Authority, United States
- Heidelberg Cement - Germany
- Orica Australia Pty. Ltd.
- Bharathi Cement Corporation - India
- Eastern Coal Council - USA
- Semirara Mining Corp, Philippines
- Medco Energi Mining Internasional
- Wilmar Investment Holdings
- Chamber of Mines of South Africa
- Rashtriya Ispat Nigam Limited - India
- Coastal Gujarat Power Limited - India
- Marubeni Corporation - India
- Toyota Tsusho Corporation, Japan
- The State Trading Corporation of India Ltd
- White Energy Company Limited
- Kideco Jaya Agung - Indonesia
- Attock Cement Pakistan Limited
- Aboitiz Power Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Mjunction Services Limited - India
- Cement Manufacturers Association - India
- Bukit Baiduri Energy - Indonesia
- Australian Coal Association
- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Mercuria Energy - Indonesia
- Mintek Dendrill Indonesia
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Coalindo Energy - Indonesia
- GVK Power & Infra Limited - India
- South Luzon Thermal Energy Corporation
- Orica Mining Services - Indonesia
- Borneo Indobara - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Straits Asia Resources Limited - Singapore
- Gujarat Electricity Regulatory Commission - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Malabar Cements Ltd - India
- PowerSource Philippines DevCo
- Indian Oil Corporation Limited
- Star Paper Mills Limited - India
- Metalloyd Limited - United Kingdom
- Agrawal Coal Company - India
- Barasentosa Lestari - Indonesia
- International Coal Ventures Pvt Ltd - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Maheswari Brothers Coal Limited - India
- SMG Consultants - Indonesia
- Kapuas Tunggal Persada - Indonesia
- SMC Global Power, Philippines
- Global Business Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Australian Commodity Traders Exchange
- Baramulti Group, Indonesia
- Romanian Commodities Exchange
- Vizag Seaport Private Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Vijayanagar Sugar Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Sojitz Corporation - Japan
- Energy Development Corp, Philippines
- Salva Resources Pvt Ltd - India
- GMR Energy Limited - India
- Planning Commission, India
- Independent Power Producers Association of India
- Indonesian Coal Mining Association
- Banpu Public Company Limited - Thailand
- Latin American Coal - Colombia
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