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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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Monday, 29 June 20
CHINA COAL IMPORT OUTLOOK: MANY MOVING PARTS, FORECAST TO FALL 10% YOY - GHEE PEH | IEEFA
China’s coal demand declined in the first quarter of 2020. According to the China National Coal Association, the country consumed 870mt in th ...
Monday, 29 June 20
ULTRAMAX: A 58,000 FIXING DELIVERY SINGAPORE TRIP, VIA EAST COAST INDIA, REDELIVERY CHINA IN THE LOW $12,000S - BALTIC BRIEFING
Capesize
As the halfway mark of 2020 arrives, the capesize market is making new highs for the year. From persistent lows earlier caused by a ba ...
Saturday, 27 June 20
CHINA'S BENCHMARK POWER COAL PRICE REMAINS FLAT - XINHUA
China’s benchmark power coal price remained flat during the past week.
The Bohai-Rim Steam-Coal Price Index (BSPI), a gauge of ...
Friday, 26 June 20
WHAT TODAY'S BAILOUTS CAN DO FOR TOMORROW'S ECONOMIES - WORLD ECONOMIC FORUM
The COVID-19 crisis provides an opportunity for governments to build fairer, more sustainable and more resilient economies.
Governments a ...
Thursday, 25 June 20
ALL YOU WANT TO KNOW ABOUT COAL MINE AUCTIONS - THE HINDU BUSINESS LINE
Last week, Prime Minister Narendra Modi threw open the auction of 41 coal blocks for commercial mining. The decision, which was part of the announc ...
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- Wilmar Investment Holdings
- Rashtriya Ispat Nigam Limited - India
- Savvy Resources Ltd - HongKong
- Semirara Mining Corp, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Billiton Holdings Pty Ltd - Australia
- Standard Chartered Bank - UAE
- Madhucon Powers Ltd - India
- Ministry of Mines - Canada
- Ministry of Transport, Egypt
- Intertek Mineral Services - Indonesia
- Toyota Tsusho Corporation, Japan
- Meralco Power Generation, Philippines
- Krishnapatnam Port Company Ltd. - India
- Electricity Authority, New Zealand
- Dalmia Cement Bharat India
- Alfred C Toepfer International GmbH - Germany
- Kideco Jaya Agung - Indonesia
- Barasentosa Lestari - Indonesia
- Africa Commodities Group - South Africa
- Salva Resources Pvt Ltd - India
- Sakthi Sugars Limited - India
- Karaikal Port Pvt Ltd - India
- Power Finance Corporation Ltd., India
- Sarangani Energy Corporation, Philippines
- White Energy Company Limited
- Manunggal Multi Energi - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Formosa Plastics Group - Taiwan
- Global Green Power PLC Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Sinarmas Energy and Mining - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Straits Asia Resources Limited - Singapore
- Minerals Council of Australia
- Energy Development Corp, Philippines
- Sical Logistics Limited - India
- Bangladesh Power Developement Board
- Bhatia International Limited - India
- Sindya Power Generating Company Private Ltd
- Neyveli Lignite Corporation Ltd, - India
- Parliament of New Zealand
- Tamil Nadu electricity Board
- Star Paper Mills Limited - India
- Semirara Mining and Power Corporation, Philippines
- Indian Oil Corporation Limited
- Holcim Trading Pte Ltd - Singapore
- TNB Fuel Sdn Bhd - Malaysia
- Bhoruka Overseas - Indonesia
- India Bulls Power Limited - India
- Bharathi Cement Corporation - India
- Carbofer General Trading SA - India
- Iligan Light & Power Inc, Philippines
- IHS Mccloskey Coal Group - USA
- Kumho Petrochemical, South Korea
- Edison Trading Spa - Italy
- Makarim & Taira - Indonesia
- Coalindo Energy - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Kartika Selabumi Mining - Indonesia
- Indika Energy - Indonesia
- Petrochimia International Co. Ltd.- Taiwan
- Parry Sugars Refinery, India
- Vedanta Resources Plc - India
- PTC India Limited - India
- Mintek Dendrill Indonesia
- Mjunction Services Limited - India
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Miang Besar Coal Terminal - Indonesia
- SMG Consultants - Indonesia
- Interocean Group of Companies - India
- Meenaskhi Energy Private Limited - India
- Attock Cement Pakistan Limited
- Samtan Co., Ltd - South Korea
- South Luzon Thermal Energy Corporation
- GAC Shipping (India) Pvt Ltd
- European Bulk Services B.V. - Netherlands
- Simpson Spence & Young - Indonesia
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Medco Energi Mining Internasional
- Petron Corporation, Philippines
- Jaiprakash Power Ventures ltd
- Larsen & Toubro Limited - India
- Eastern Coal Council - USA
- Directorate Of Revenue Intelligence - India
- Ambuja Cements Ltd - India
- GVK Power & Infra Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Therma Luzon, Inc, Philippines
- Leighton Contractors Pty Ltd - Australia
- SN Aboitiz Power Inc, Philippines
- Romanian Commodities Exchange
- Vijayanagar Sugar Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Binh Thuan Hamico - Vietnam
- Riau Bara Harum - Indonesia
- Baramulti Group, Indonesia
- Sree Jayajothi Cements Limited - India
- Price Waterhouse Coopers - Russia
- Borneo Indobara - Indonesia
- Lanco Infratech Ltd - India
- Heidelberg Cement - Germany
- Maheswari Brothers Coal Limited - India
- Karbindo Abesyapradhi - Indoneisa
- Energy Link Ltd, New Zealand
- Aditya Birla Group - India
- Orica Mining Services - Indonesia
- LBH Netherlands Bv - Netherlands
- Bahari Cakrawala Sebuku - Indonesia
- Indian Energy Exchange, India
- Cement Manufacturers Association - India
- IEA Clean Coal Centre - UK
- Renaissance Capital - South Africa
- Cigading International Bulk Terminal - Indonesia
- Georgia Ports Authority, United States
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Bukit Makmur.PT - Indonesia
- Planning Commission, India
- Goldman Sachs - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- OPG Power Generation Pvt Ltd - India
- Sojitz Corporation - Japan
- VISA Power Limited - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- CNBM International Corporation - China
- The State Trading Corporation of India Ltd
- Globalindo Alam Lestari - Indonesia
- Uttam Galva Steels Limited - India
- Asmin Koalindo Tuhup - Indonesia
- The Treasury - Australian Government
- Indonesian Coal Mining Association
- Indogreen Group - Indonesia
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Chettinad Cement Corporation Ltd - India
- Trasteel International SA, Italy
- Timah Investasi Mineral - Indoneisa
- Australian Coal Association
- Tata Chemicals Ltd - India
- ICICI Bank Limited - India
- Global Business Power Corporation, Philippines
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Jorong Barutama Greston.PT - Indonesia
- The University of Queensland
- London Commodity Brokers - England
- Bhushan Steel Limited - India
- Essar Steel Hazira Ltd - India
- Aboitiz Power Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Grasim Industreis Ltd - India
- Anglo American - United Kingdom
- Videocon Industries ltd - India
- Thiess Contractors Indonesia
- Gujarat Sidhee Cement - India
- Altura Mining Limited, Indonesia
- Pendopo Energi Batubara - Indonesia
- Economic Council, Georgia
- PowerSource Philippines DevCo
- GMR Energy Limited - India
- Orica Australia Pty. Ltd.
- Bukit Baiduri Energy - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Port Waratah Coal Services - Australia
- PNOC Exploration Corporation - Philippines
- Wood Mackenzie - Singapore
- McConnell Dowell - Australia
- Gujarat Mineral Development Corp Ltd - India
- Antam Resourcindo - Indonesia
- Merrill Lynch Commodities Europe
- Oldendorff Carriers - Singapore
- SMC Global Power, Philippines
- Kaltim Prima Coal - Indonesia
- International Coal Ventures Pvt Ltd - India
- Central Java Power - Indonesia
- Gujarat Electricity Regulatory Commission - India
- Kepco SPC Power Corporation, Philippines
- Rio Tinto Coal - Australia
- Mercator Lines Limited - India
- Thai Mozambique Logistica
- CIMB Investment Bank - Malaysia
- GN Power Mariveles Coal Plant, Philippines
- AsiaOL BioFuels Corp., Philippines
- Mercuria Energy - Indonesia
- TeaM Sual Corporation - Philippines
- Chamber of Mines of South Africa
- Commonwealth Bank - Australia
- Metalloyd Limited - United Kingdom
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Siam City Cement PLC, Thailand
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Bulk Trading Sa - Switzerland
- Deloitte Consulting - India
- Singapore Mercantile Exchange
- Eastern Energy - Thailand
- Ministry of Finance - Indonesia
- Australian Commodity Traders Exchange
- Vizag Seaport Private Limited - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Directorate General of MIneral and Coal - Indonesia
- MS Steel International - UAE
- Banpu Public Company Limited - Thailand
- Agrawal Coal Company - India
- Posco Energy - South Korea
- Central Electricity Authority - India
- Latin American Coal - Colombia
- Jindal Steel & Power Ltd - India
- Kobexindo Tractors - Indoneisa
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