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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 June 20
DON'T FORGET THE REAL PURPOSE OF RISK ASSESSMENTS - GARD
KNOWLEDGE TO ELEVATE
When doing a risk assessment, we often overcomplicate it and forget its real purpose.
Rather than ensuring that crew ...
Wednesday, 03 June 20
MARKET INSIGHT - INTERMODAL
Once again shipping is about to venture into uncharted waters and before the challenges of the past decade are forgotten, shipowners will have to o ...
Tuesday, 02 June 20
KOSPO LOOKING FOR 80000 MT OF 4200 NCV COAL FOR JULY
COALspot.com: Korea Southern Power Co., Ltd. (KOSPO) has issued an International tender for 80,000 Metric Tons (MT) 4200 NCV coal for 12 - 21, July ...
Tuesday, 02 June 20
INDONESIAN COAL MINER BUMI RESOURCES Q1 OUTPUT UP 5% - REUTERS
Indonesia’s largest coal miner Bumi Resources posted a 5% increase in first-quarter output at 20.8 million tonnes, the company said in a stat ...
Tuesday, 02 June 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.86 PCT - XINHUA
China Taiyuan coal transaction price index stood at 123.95 points Monday, down 0.86 percent week on week.
The index, released by Chi ...
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- ASAPP Information Group - India
- Gujarat Electricity Regulatory Commission - India
- Gujarat Mineral Development Corp Ltd - India
- Toyota Tsusho Corporation, Japan
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- Oldendorff Carriers - Singapore
- Coalindo Energy - Indonesia
- Australian Commodity Traders Exchange
- Meralco Power Generation, Philippines
- Kumho Petrochemical, South Korea
- Mercuria Energy - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- Lanco Infratech Ltd - India
- Banpu Public Company Limited - Thailand
- Globalindo Alam Lestari - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Georgia Ports Authority, United States
- Tata Chemicals Ltd - India
- Indian Oil Corporation Limited
- Renaissance Capital - South Africa
- Vedanta Resources Plc - India
- Intertek Mineral Services - Indonesia
- Rio Tinto Coal - Australia
- OPG Power Generation Pvt Ltd - India
- Xindia Steels Limited - India
- Madhucon Powers Ltd - India
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Aditya Birla Group - India
- Neyveli Lignite Corporation Ltd, - India
- Posco Energy - South Korea
- Tamil Nadu electricity Board
- Energy Link Ltd, New Zealand
- Semirara Mining and Power Corporation, Philippines
- Electricity Generating Authority of Thailand
- Electricity Authority, New Zealand
- Bhoruka Overseas - Indonesia
- Sical Logistics Limited - India
- Altura Mining Limited, Indonesia
- Aboitiz Power Corporation - Philippines
- Coal and Oil Company - UAE
- Kaltim Prima Coal - Indonesia
- Alfred C Toepfer International GmbH - Germany
- Singapore Mercantile Exchange
- Jorong Barutama Greston.PT - Indonesia
- White Energy Company Limited
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Simpson Spence & Young - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Wilmar Investment Holdings
- Malabar Cements Ltd - India
- Indian Energy Exchange, India
- Siam City Cement - Thailand
- Rashtriya Ispat Nigam Limited - India
- Binh Thuan Hamico - Vietnam
- ICICI Bank Limited - India
- Maharashtra Electricity Regulatory Commission - India
- India Bulls Power Limited - India
- Kepco SPC Power Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Eastern Coal Council - USA
- Timah Investasi Mineral - Indoneisa
- Indika Energy - Indonesia
- Iligan Light & Power Inc, Philippines
- Vijayanagar Sugar Pvt Ltd - India
- Makarim & Taira - Indonesia
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Australian Coal Association
- Chamber of Mines of South Africa
- Sindya Power Generating Company Private Ltd
- AsiaOL BioFuels Corp., Philippines
- Baramulti Group, Indonesia
- Standard Chartered Bank - UAE
- Kalimantan Lumbung Energi - Indonesia
- Bayan Resources Tbk. - Indonesia
- Samtan Co., Ltd - South Korea
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Planning Commission, India
- London Commodity Brokers - England
- Manunggal Multi Energi - Indonesia
- Deloitte Consulting - India
- Minerals Council of Australia
- Indogreen Group - Indonesia
- Petron Corporation, Philippines
- Bangladesh Power Developement Board
- Ministry of Mines - Canada
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Maheswari Brothers Coal Limited - India
- Chettinad Cement Corporation Ltd - India
- Kideco Jaya Agung - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Romanian Commodities Exchange
- Kobexindo Tractors - Indoneisa
- SMC Global Power, Philippines
- Vizag Seaport Private Limited - India
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- Ministry of Finance - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Parry Sugars Refinery, India
- Heidelberg Cement - Germany
- Agrawal Coal Company - India
- SMG Consultants - Indonesia
- San Jose City I Power Corp, Philippines
- Metalloyd Limited - United Kingdom
- Dalmia Cement Bharat India
- Thai Mozambique Logistica
- Grasim Industreis Ltd - India
- Eastern Energy - Thailand
- Jindal Steel & Power Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Orica Australia Pty. Ltd.
- Pipit Mutiara Jaya. PT, Indonesia
- Semirara Mining Corp, Philippines
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Mercator Lines Limited - India
- PetroVietnam Power Coal Import and Supply Company
- Salva Resources Pvt Ltd - India
- Larsen & Toubro Limited - India
- Savvy Resources Ltd - HongKong
- Port Waratah Coal Services - Australia
- PowerSource Philippines DevCo
- Merrill Lynch Commodities Europe
- Bulk Trading Sa - Switzerland
- Medco Energi Mining Internasional
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- CNBM International Corporation - China
- Bank of Tokyo Mitsubishi UFJ Ltd
- Trasteel International SA, Italy
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- PTC India Limited - India
- Billiton Holdings Pty Ltd - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Ministry of Transport, Egypt
- Central Java Power - Indonesia
- Ambuja Cements Ltd - India
- Coastal Gujarat Power Limited - India
- Formosa Plastics Group - Taiwan
- Bukit Baiduri Energy - Indonesia
- Global Business Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- GN Power Mariveles Coal Plant, Philippines
- Jaiprakash Power Ventures ltd
- Barasentosa Lestari - Indonesia
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Marubeni Corporation - India
- LBH Netherlands Bv - Netherlands
- TeaM Sual Corporation - Philippines
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Therma Luzon, Inc, Philippines
- Energy Development Corp, Philippines
- Commonwealth Bank - Australia
- SN Aboitiz Power Inc, Philippines
- Sarangani Energy Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- PNOC Exploration Corporation - Philippines
- Parliament of New Zealand
- VISA Power Limited - India
- Sinarmas Energy and Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- Borneo Indobara - Indonesia
- The Treasury - Australian Government
- Videocon Industries ltd - India
- Ind-Barath Power Infra Limited - India
- Global Coal Blending Company Limited - Australia
- Meenaskhi Energy Private Limited - India
- New Zealand Coal & Carbon
- International Coal Ventures Pvt Ltd - India
- Latin American Coal - Colombia
- Miang Besar Coal Terminal - Indonesia
- Power Finance Corporation Ltd., India
- Edison Trading Spa - Italy
- Central Electricity Authority - India
- Mintek Dendrill Indonesia
- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Cigading International Bulk Terminal - Indonesia
- South Luzon Thermal Energy Corporation
- Riau Bara Harum - Indonesia
- Wood Mackenzie - Singapore
- Goldman Sachs - Singapore
- Independent Power Producers Association of India
- The University of Queensland
- Essar Steel Hazira Ltd - India
- Indo Tambangraya Megah - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Uttam Galva Steels Limited - India
- Antam Resourcindo - Indonesia
- GMR Energy Limited - India
- MS Steel International - UAE
- Cement Manufacturers Association - India
- Leighton Contractors Pty Ltd - Australia
- Mjunction Services Limited - India
- GVK Power & Infra Limited - India
- Bukit Asam (Persero) Tbk - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Bhatia International Limited - India
- McConnell Dowell - Australia
- Attock Cement Pakistan Limited
- Karaikal Port Pvt Ltd - India
- Sree Jayajothi Cements Limited - India
- Sojitz Corporation - Japan
- Africa Commodities Group - South Africa
- CIMB Investment Bank - Malaysia
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