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Wednesday, 05 October 16
SHIPPING MARKET INSIGHT
 On September 27th the OPEC petroleum and energy ministers arrived in Algeria to attend the International Energy Forum, which brought together producers and consumers to discuss the present energy market conditions. After the closing of the IEF conference, OPEC Ministers held informal talks in an effort to cut a deal that would either freeze or reduce oil supply in pursuit of more stabilized markets and elevated oil prices. The current output OPEC members is more than 33.2 million barrels a day and inventories will grow even higher if no action is taken. It has been argued that oil production needs to be reduced by 1 million barrels a day so that the market rebalances. Likewise, Algeria’s energy minister reasoned that “oil has sufficiently fluctuated on speculation that OPEC and Russia will agree to support oil prices in the midst of oversupply”.
The question that arises is if OPEC members can do the impossible, which for most seems like having a mountain to climb. As discussed, one of the reasons that oil prices are low is due to the oversupplied market with members having had no success in negotiating production cutbacks so far. Major producers, driven by Saudi Arabia have been pumping at near record levels over the last two years, trying to maintain their market share by squeezing out higher cost producers such as the U.S and Canada. Consequently, since 2014 oil prices have dropped by 60% and U.S. production has diminished. The income of nations such as Nigeria, Saudi Arabia and Russia depends on their exports and low prices have proven to be troublesome. Furthermore, consenting to production freeze at current levels may seem a fair compromise but not a promising solution. IEA forecasts that global oil surplus will last well into 2017 as demand grows at a slower pace than previously foreseen, particularly in Asia. Meanwhile, not only OPEC members output is at record levels but Russia is also producing close to its maximum capacity, while Libya and Nigeria indicate they want to raise their output for the rest of this year.
Moreover, Iran's full on return earlier this year further affected the market, as the country has been continuously increasing its oil output in an effort to once more claim its place as one of the world's top oil exporters. In any case, Saudi Arabia won’t wish for Iran to expand its production while the country itself is cutting back as that would mean handing over market share to its main regional competitor. It was recently reported that Saudi Arabia may agree to decrease production if only Iran acknowledges freezing its output level. Either way, once OPEC members come to an agreement they won’t want prices to go higher than $55-60 per barrel as they will risk helping higher cost competitors, such as shale oil producers, to get back in the game.
Inevitably, the equilibrium point is fragile for leading oil producers to achieve. On one side, a greedy stance to accomplish higher prices will give the leeway to higher cost producers to step in and on the other side a conservative attitude to defend their market share, flirts with the risk of operating at a loss. The global oil market has faced numerous difficulties, deriving essentially from excess supply. Oil-exporting countries and companies’ profits have deteriorated, increasing their budget deficits and crippling their economy. Additionally, those low prices inevitably lead to layoffs and reductions in new venture spending. But even with all these negative effects, the scenario in which the stagnation of oil major oil producers eventually leads to demand exceeding supply and leads to higher prices is a bit off. So IT IS really down to OPEC’s joined action despite many believing that the organization can’t do much these days.
By Katerina Restis
Tanker Chartering
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms. Eva Tzima
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Monday, 29 August 16
THE FREIGHT MARKET WAS STEADY AND FIRM THIS PAST WEEK; BCI ROSE 18.74%
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities rose and ending in a positive note this past week except ...
Friday, 26 August 16
WEEKLY US COAL OUTPUT UP 0.7% W/W TO 16 MMST: EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totalled an estimated 16 million short tons ...
Thursday, 25 August 16
SUPRAMAXES ARE BEING FIXED IN REGION OF $9000
Supramax
Due to Chinese coal imports which continues to source much of the tonnage in SE Asia combined with a good flow of mineral exports ex Aus ...
Wednesday, 24 August 16
MARKET INSIGHT
Brazil and the world bid farewell on Sunday to the first Olympic Games in South America in the midst of a finale meant to be both one last bash and ...
Wednesday, 24 August 16
DRY BULK VESSELS FACE CONTINUED DISTRESS - CLEAR ASSET
Dry bulk vessels have faced extreme distress in recent years. With a combination of factors including newer vessels being ordered with up to 5-year ...
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- Lanco Infratech Ltd - India
- Binh Thuan Hamico - Vietnam
- Kohat Cement Company Ltd. - Pakistan
- Simpson Spence & Young - Indonesia
- International Coal Ventures Pvt Ltd - India
- Wood Mackenzie - Singapore
- Ceylon Electricity Board - Sri Lanka
- Savvy Resources Ltd - HongKong
- Kideco Jaya Agung - Indonesia
- IHS Mccloskey Coal Group - USA
- OPG Power Generation Pvt Ltd - India
- Bhushan Steel Limited - India
- Coastal Gujarat Power Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Medco Energi Mining Internasional
- Dalmia Cement Bharat India
- Bangladesh Power Developement Board
- Bukit Asam (Persero) Tbk - Indonesia
- Therma Luzon, Inc, Philippines
- Petron Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Meenaskhi Energy Private Limited - India
- Jindal Steel & Power Ltd - India
- Madhucon Powers Ltd - India
- Straits Asia Resources Limited - Singapore
- Sinarmas Energy and Mining - Indonesia
- Africa Commodities Group - South Africa
- Merrill Lynch Commodities Europe
- London Commodity Brokers - England
- Maharashtra Electricity Regulatory Commission - India
- Energy Development Corp, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Australian Commodity Traders Exchange
- TeaM Sual Corporation - Philippines
- Indogreen Group - Indonesia
- Global Green Power PLC Corporation, Philippines
- Uttam Galva Steels Limited - India
- Karaikal Port Pvt Ltd - India
- Eastern Coal Council - USA
- Coal and Oil Company - UAE
- Vedanta Resources Plc - India
- Bahari Cakrawala Sebuku - Indonesia
- Parliament of New Zealand
- LBH Netherlands Bv - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Siam City Cement - Thailand
- Mercuria Energy - Indonesia
- The Treasury - Australian Government
- Iligan Light & Power Inc, Philippines
- Bukit Baiduri Energy - Indonesia
- Krishnapatnam Port Company Ltd. - India
- Billiton Holdings Pty Ltd - Australia
- Star Paper Mills Limited - India
- Interocean Group of Companies - India
- Pendopo Energi Batubara - Indonesia
- ICICI Bank Limited - India
- Mercator Lines Limited - India
- Carbofer General Trading SA - India
- Latin American Coal - Colombia
- Cement Manufacturers Association - India
- Xindia Steels Limited - India
- Central Java Power - Indonesia
- Kumho Petrochemical, South Korea
- New Zealand Coal & Carbon
- Rashtriya Ispat Nigam Limited - India
- Leighton Contractors Pty Ltd - Australia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Chamber of Mines of South Africa
- South Luzon Thermal Energy Corporation
- Aditya Birla Group - India
- Singapore Mercantile Exchange
- Mjunction Services Limited - India
- Videocon Industries ltd - India
- The University of Queensland
- Globalindo Alam Lestari - Indonesia
- Central Electricity Authority - India
- Metalloyd Limited - United Kingdom
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Transport, Egypt
- VISA Power Limited - India
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Kapuas Tunggal Persada - Indonesia
- Heidelberg Cement - Germany
- Cigading International Bulk Terminal - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Baramulti Group, Indonesia
- Banpu Public Company Limited - Thailand
- Ministry of Finance - Indonesia
- Ministry of Mines - Canada
- Indo Tambangraya Megah - Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Intertek Mineral Services - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Independent Power Producers Association of India
- GMR Energy Limited - India
- GAC Shipping (India) Pvt Ltd
- Attock Cement Pakistan Limited
- Riau Bara Harum - Indonesia
- MS Steel International - UAE
- Australian Coal Association
- Maheswari Brothers Coal Limited - India
- Samtan Co., Ltd - South Korea
- Electricity Authority, New Zealand
- Alfred C Toepfer International GmbH - Germany
- Bayan Resources Tbk. - Indonesia
- India Bulls Power Limited - India
- Rio Tinto Coal - Australia
- Meralco Power Generation, Philippines
- Sarangani Energy Corporation, Philippines
- Oldendorff Carriers - Singapore
- Romanian Commodities Exchange
- Sindya Power Generating Company Private Ltd
- White Energy Company Limited
- Power Finance Corporation Ltd., India
- Electricity Generating Authority of Thailand
- Global Coal Blending Company Limited - Australia
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- San Jose City I Power Corp, Philippines
- CNBM International Corporation - China
- Pipit Mutiara Jaya. PT, Indonesia
- Indian Energy Exchange, India
- Economic Council, Georgia
- PowerSource Philippines DevCo
- SMC Global Power, Philippines
- Directorate Of Revenue Intelligence - India
- Malabar Cements Ltd - India
- Global Business Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Commonwealth Bank - Australia
- Holcim Trading Pte Ltd - Singapore
- Planning Commission, India
- Gujarat Electricity Regulatory Commission - India
- Tata Chemicals Ltd - India
- Antam Resourcindo - Indonesia
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Salva Resources Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- Orica Australia Pty. Ltd.
- Siam City Cement PLC, Thailand
- Marubeni Corporation - India
- Goldman Sachs - Singapore
- Indika Energy - Indonesia
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Toyota Tsusho Corporation, Japan
- Tamil Nadu electricity Board
- Standard Chartered Bank - UAE
- Indonesian Coal Mining Association
- Posco Energy - South Korea
- Price Waterhouse Coopers - Russia
- Sakthi Sugars Limited - India
- Indian Oil Corporation Limited
- Edison Trading Spa - Italy
- Sojitz Corporation - Japan
- Sical Logistics Limited - India
- Bharathi Cement Corporation - India
- Thai Mozambique Logistica
- Bukit Makmur.PT - Indonesia
- Gujarat Sidhee Cement - India
- Mintek Dendrill Indonesia
- Energy Link Ltd, New Zealand
- Formosa Plastics Group - Taiwan
- Parry Sugars Refinery, India
- Wilmar Investment Holdings
- Asmin Koalindo Tuhup - Indonesia
- Thiess Contractors Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Altura Mining Limited, Indonesia
- Bulk Trading Sa - Switzerland
- Barasentosa Lestari - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Aboitiz Power Corporation - Philippines
- PNOC Exploration Corporation - Philippines
- Sree Jayajothi Cements Limited - India
- ASAPP Information Group - India
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Port Waratah Coal Services - Australia
- Makarim & Taira - Indonesia
- Ambuja Cements Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Larsen & Toubro Limited - India
- European Bulk Services B.V. - Netherlands
- Kalimantan Lumbung Energi - Indonesia
- Chettinad Cement Corporation Ltd - India
- Jaiprakash Power Ventures ltd
- Georgia Ports Authority, United States
- Semirara Mining Corp, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Vijayanagar Sugar Pvt Ltd - India
- Manunggal Multi Energi - Indonesia
- Bhoruka Overseas - Indonesia
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- Ind-Barath Power Infra Limited - India
- Essar Steel Hazira Ltd - India
- Orica Mining Services - Indonesia
- GVK Power & Infra Limited - India
- SN Aboitiz Power Inc, Philippines
- SMG Consultants - Indonesia
- Timah Investasi Mineral - Indoneisa
- Renaissance Capital - South Africa
- AsiaOL BioFuels Corp., Philippines
- PTC India Limited - India
- Minerals Council of Australia
- Vizag Seaport Private Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Petrochimia International Co. Ltd.- Taiwan
- Kobexindo Tractors - Indoneisa
- Trasteel International SA, Italy
- Offshore Bulk Terminal Pte Ltd, Singapore
- Kaltim Prima Coal - Indonesia
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