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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, 11 July 16
DRY BULK MARKET: UP TO 30 MILLION DWT OF OLDER BULKERS WILL NEED TO BE SCRAPPED BY END OF 2017 FOR MARKET TO FIND BALANCE
Tonnage oversupply in the dry bulk market is more than evident, as newbuildings have been hitting the water faster than owners can scrap their olde ...
Friday, 08 July 16
U.S. WEEKLY COAL OUTPUT UP 3% TO 14.1 MMST - EIA
COALspot.com – U.S, world’s second largest coal producers has produced approximately totalled an estimated 14.1 million short tons (mms ...
Thursday, 07 July 16
PANAMAX : THE TENDENCY FROM LAST WEEK CONTINUES WITH A CONSIDERABLY STRONGER SENTIMENT ALL ACROSS THE BLOCK - FEARNLEYS
Capesize
Rates have been holding at steady levels over the last weeks but towards end of this period they are becoming under more pressure as gen ...
Thursday, 07 July 16
CONSOLIDATION TO RULE OVER SHIPPING, AS EXECUTIVES SEEK INVESTMENT OPPORTUNITIES IN CHINA, INDIA AND EUROPE SAYS NORTON ROSE SURVEY
The transport sector is looking to Asia Pacific as the key market for investment over the next five years, according to the seventh The way ahead T ...
Wednesday, 06 July 16
KOMIPO INVITES BIDS FOR 780000 MT OF BITUMINOUS COAL
COALspot.com: South Korea state-owned utility Korea Midland Power (KOMIPO) issued a new tender for 780,000 Metric Tons of Bituminous Coal for its B ...
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- Star Paper Mills Limited - India
- Bharathi Cement Corporation - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Chettinad Cement Corporation Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Ind-Barath Power Infra Limited - India
- Timah Investasi Mineral - Indoneisa
- Sojitz Corporation - Japan
- Wood Mackenzie - Singapore
- Electricity Authority, New Zealand
- Mercuria Energy - Indonesia
- Minerals Council of Australia
- Tamil Nadu electricity Board
- Xindia Steels Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Bangladesh Power Developement Board
- Coal and Oil Company - UAE
- Rashtriya Ispat Nigam Limited - India
- Essar Steel Hazira Ltd - India
- The Treasury - Australian Government
- Latin American Coal - Colombia
- Kaltim Prima Coal - Indonesia
- Interocean Group of Companies - India
- Straits Asia Resources Limited - Singapore
- Jaiprakash Power Ventures ltd
- India Bulls Power Limited - India
- Orica Mining Services - Indonesia
- Sinarmas Energy and Mining - Indonesia
- Central Electricity Authority - India
- Savvy Resources Ltd - HongKong
- Central Java Power - Indonesia
- Trasteel International SA, Italy
- McConnell Dowell - Australia
- Energy Link Ltd, New Zealand
- Thai Mozambique Logistica
- Semirara Mining Corp, Philippines
- Global Business Power Corporation, Philippines
- Ambuja Cements Ltd - India
- Mjunction Services Limited - India
- Petron Corporation, Philippines
- Eastern Coal Council - USA
- Aditya Birla Group - India
- Maheswari Brothers Coal Limited - India
- Binh Thuan Hamico - Vietnam
- Formosa Plastics Group - Taiwan
- Toyota Tsusho Corporation, Japan
- Banpu Public Company Limited - Thailand
- Iligan Light & Power Inc, Philippines
- Holcim Trading Pte Ltd - Singapore
- European Bulk Services B.V. - Netherlands
- LBH Netherlands Bv - Netherlands
- Riau Bara Harum - Indonesia
- Tata Chemicals Ltd - India
- Energy Development Corp, Philippines
- Global Green Power PLC Corporation, Philippines
- Power Finance Corporation Ltd., India
- Jorong Barutama Greston.PT - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- SMC Global Power, Philippines
- IHS Mccloskey Coal Group - USA
- Heidelberg Cement - Germany
- Directorate General of MIneral and Coal - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- PNOC Exploration Corporation - Philippines
- Coastal Gujarat Power Limited - India
- Barasentosa Lestari - Indonesia
- Leighton Contractors Pty Ltd - Australia
- CIMB Investment Bank - Malaysia
- Wilmar Investment Holdings
- New Zealand Coal & Carbon
- GAC Shipping (India) Pvt Ltd
- Semirara Mining and Power Corporation, Philippines
- Alfred C Toepfer International GmbH - Germany
- San Jose City I Power Corp, Philippines
- Bukit Baiduri Energy - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Agrawal Coal Company - India
- OPG Power Generation Pvt Ltd - India
- Coalindo Energy - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Indogreen Group - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kepco SPC Power Corporation, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Posco Energy - South Korea
- Salva Resources Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Videocon Industries ltd - India
- IEA Clean Coal Centre - UK
- Baramulti Group, Indonesia
- Ceylon Electricity Board - Sri Lanka
- Meenaskhi Energy Private Limited - India
- Medco Energi Mining Internasional
- GVK Power & Infra Limited - India
- Grasim Industreis Ltd - India
- Aboitiz Power Corporation - Philippines
- Attock Cement Pakistan Limited
- Madhucon Powers Ltd - India
- Electricity Generating Authority of Thailand
- Indo Tambangraya Megah - Indonesia
- Indian Energy Exchange, India
- The University of Queensland
- Intertek Mineral Services - Indonesia
- Kobexindo Tractors - Indoneisa
- GN Power Mariveles Coal Plant, Philippines
- SMG Consultants - Indonesia
- Therma Luzon, Inc, Philippines
- Ministry of Finance - Indonesia
- Renaissance Capital - South Africa
- Edison Trading Spa - Italy
- South Luzon Thermal Energy Corporation
- Mintek Dendrill Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Uttam Galva Steels Limited - India
- Lanco Infratech Ltd - India
- Carbofer General Trading SA - India
- Gujarat Sidhee Cement - India
- Vizag Seaport Private Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ASAPP Information Group - India
- Kideco Jaya Agung - Indonesia
- Global Coal Blending Company Limited - Australia
- Goldman Sachs - Singapore
- Krishnapatnam Port Company Ltd. - India
- Gujarat Mineral Development Corp Ltd - India
- Australian Coal Association
- Sical Logistics Limited - India
- Billiton Holdings Pty Ltd - Australia
- Merrill Lynch Commodities Europe
- Standard Chartered Bank - UAE
- Africa Commodities Group - South Africa
- Singapore Mercantile Exchange
- The State Trading Corporation of India Ltd
- Eastern Energy - Thailand
- Romanian Commodities Exchange
- SN Aboitiz Power Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Cigading International Bulk Terminal - Indonesia
- Dalmia Cement Bharat India
- Bukit Makmur.PT - Indonesia
- Independent Power Producers Association of India
- Siam City Cement - Thailand
- PTC India Limited - India
- Pendopo Energi Batubara - Indonesia
- Kumho Petrochemical, South Korea
- Makarim & Taira - Indonesia
- Indonesian Coal Mining Association
- International Coal Ventures Pvt Ltd - India
- Parry Sugars Refinery, India
- Ministry of Transport, Egypt
- Jindal Steel & Power Ltd - India
- Rio Tinto Coal - Australia
- Australian Commodity Traders Exchange
- Oldendorff Carriers - Singapore
- Bulk Trading Sa - Switzerland
- Bukit Asam (Persero) Tbk - Indonesia
- Deloitte Consulting - India
- TNB Fuel Sdn Bhd - Malaysia
- Karaikal Port Pvt Ltd - India
- Port Waratah Coal Services - Australia
- AsiaOL BioFuels Corp., Philippines
- VISA Power Limited - India
- Sree Jayajothi Cements Limited - India
- Thiess Contractors Indonesia
- Globalindo Alam Lestari - Indonesia
- Marubeni Corporation - India
- TeaM Sual Corporation - Philippines
- Price Waterhouse Coopers - Russia
- Ministry of Mines - Canada
- MS Steel International - UAE
- Vedanta Resources Plc - India
- Vijayanagar Sugar Pvt Ltd - India
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- Samtan Co., Ltd - South Korea
- Malabar Cements Ltd - India
- Orica Australia Pty. Ltd.
- Meralco Power Generation, Philippines
- Borneo Indobara - Indonesia
- PowerSource Philippines DevCo
- Indika Energy - Indonesia
- Simpson Spence & Young - Indonesia
- Metalloyd Limited - United Kingdom
- Asmin Koalindo Tuhup - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Mercator Lines Limited - India
- Neyveli Lignite Corporation Ltd, - India
- CNBM International Corporation - China
- Miang Besar Coal Terminal - Indonesia
- White Energy Company Limited
- Altura Mining Limited, Indonesia
- Siam City Cement PLC, Thailand
- Economic Council, Georgia
- Parliament of New Zealand
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Petrochimia International Co. Ltd.- Taiwan
- Chamber of Mines of South Africa
- Anglo American - United Kingdom
- Sakthi Sugars Limited - India
- Manunggal Multi Energi - Indonesia
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- Cement Manufacturers Association - India
- Directorate Of Revenue Intelligence - India
- Sarangani Energy Corporation, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- London Commodity Brokers - England
- ICICI Bank Limited - India
- Planning Commission, India
- Larsen & Toubro Limited - India
- Bhatia International Limited - India
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