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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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Thursday, 19 May 16
AUSTRALIAN IRON ORE CARGOES PUSHED UP THE FREIGHT RATES FOR CAPE THIS WEEK - FEARNLEYS
Cape
It has been a big jump in the freight rates for Cape size this week, says Fearnleys in its latest weekly report. All of the Australian iron ...
Thursday, 19 May 16
DISPUTE OVER VAT ON COAL DRAGS ON, CAUSING DOUBLE-BLOW TO MINERS - JP
The dispute over the value-added tax ( VAT ) mechanism between coal miners operating under third-generation contracts and the Finance Ministry&rsqu ...
Wednesday, 18 May 16
DRY BULK OUTLOOK REMAINS GLOOMY SAYS DANISH SHIP FINANCE, AS SHIPPING NEEDS TO RETHINK BUSINESS MODEL - HELLENIC SHIPPING
Our Shipping Market Review – May 2016 is devoted to the fourth industrial revolution. To understand the truly disruptive nature of the fourth ...
Wednesday, 18 May 16
LONG TERM FUNDAMENTALS ARE SLOWLY IMPROVING FOR THE DRY BULK MARKET - INTERMODAL
As we are approaching the end of the first half of the year, there is a number of market participants over at the dry bulk sector that have started ...
Tuesday, 17 May 16
INDONESIAN COAL PRICE REFERENCE DECLINE AGAIN
COALspot.com: The Indonesia Coal Benchmark Price declined in May 2016.
The Director General of Mineral and Coal of Indonesia, the regulator of ...
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- Star Paper Mills Limited - India
- Alfred C Toepfer International GmbH - Germany
- South Luzon Thermal Energy Corporation
- GMR Energy Limited - India
- Romanian Commodities Exchange
- Rashtriya Ispat Nigam Limited - India
- Merrill Lynch Commodities Europe
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Deloitte Consulting - India
- CIMB Investment Bank - Malaysia
- Globalindo Alam Lestari - Indonesia
- Parliament of New Zealand
- Ind-Barath Power Infra Limited - India
- Sinarmas Energy and Mining - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Electricity Regulatory Commission - India
- Marubeni Corporation - India
- Kohat Cement Company Ltd. - Pakistan
- Australian Coal Association
- Australian Commodity Traders Exchange
- Malabar Cements Ltd - India
- Coal and Oil Company - UAE
- Altura Mining Limited, Indonesia
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- PNOC Exploration Corporation - Philippines
- Renaissance Capital - South Africa
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Indogreen Group - Indonesia
- Ministry of Transport, Egypt
- ICICI Bank Limited - India
- Standard Chartered Bank - UAE
- Baramulti Group, Indonesia
- Global Coal Blending Company Limited - Australia
- Eastern Energy - Thailand
- Singapore Mercantile Exchange
- Timah Investasi Mineral - Indoneisa
- Maharashtra Electricity Regulatory Commission - India
- International Coal Ventures Pvt Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Bayan Resources Tbk. - Indonesia
- Sree Jayajothi Cements Limited - India
- New Zealand Coal & Carbon
- Coalindo Energy - Indonesia
- Price Waterhouse Coopers - Russia
- GAC Shipping (India) Pvt Ltd
- Antam Resourcindo - Indonesia
- Indika Energy - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- GN Power Mariveles Coal Plant, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Carbofer General Trading SA - India
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Sarangani Energy Corporation, Philippines
- Mercuria Energy - Indonesia
- Coastal Gujarat Power Limited - India
- Samtan Co., Ltd - South Korea
- Gujarat Sidhee Cement - India
- Sojitz Corporation - Japan
- Manunggal Multi Energi - Indonesia
- Bharathi Cement Corporation - India
- PTC India Limited - India
- Lanco Infratech Ltd - India
- Videocon Industries ltd - India
- VISA Power Limited - India
- Kobexindo Tractors - Indoneisa
- Simpson Spence & Young - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meralco Power Generation, Philippines
- Central Electricity Authority - India
- Energy Link Ltd, New Zealand
- ASAPP Information Group - India
- Mjunction Services Limited - India
- Formosa Plastics Group - Taiwan
- San Jose City I Power Corp, Philippines
- TNB Fuel Sdn Bhd - Malaysia
- Therma Luzon, Inc, Philippines
- Bangladesh Power Developement Board
- Pipit Mutiara Jaya. PT, Indonesia
- The Treasury - Australian Government
- Sindya Power Generating Company Private Ltd
- Sakthi Sugars Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Xindia Steels Limited - India
- Straits Asia Resources Limited - Singapore
- Pendopo Energi Batubara - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Mintek Dendrill Indonesia
- Ministry of Mines - Canada
- Chettinad Cement Corporation Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- McConnell Dowell - Australia
- Madhucon Powers Ltd - India
- MS Steel International - UAE
- Tata Chemicals Ltd - India
- Thai Mozambique Logistica
- SMG Consultants - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Wilmar Investment Holdings
- Karbindo Abesyapradhi - Indoneisa
- IHS Mccloskey Coal Group - USA
- Parry Sugars Refinery, India
- Siam City Cement - Thailand
- Orica Mining Services - Indonesia
- Latin American Coal - Colombia
- Edison Trading Spa - Italy
- Meenaskhi Energy Private Limited - India
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Petron Corporation, Philippines
- Larsen & Toubro Limited - India
- Orica Australia Pty. Ltd.
- Energy Development Corp, Philippines
- Planning Commission, India
- Indo Tambangraya Megah - Indonesia
- Essar Steel Hazira Ltd - India
- Kartika Selabumi Mining - Indonesia
- Chamber of Mines of South Africa
- Toyota Tsusho Corporation, Japan
- Posco Energy - South Korea
- Attock Cement Pakistan Limited
- Trasteel International SA, Italy
- Minerals Council of Australia
- Bhushan Steel Limited - India
- Medco Energi Mining Internasional
- Asmin Koalindo Tuhup - Indonesia
- Aboitiz Power Corporation - Philippines
- Commonwealth Bank - Australia
- CNBM International Corporation - China
- Banpu Public Company Limited - Thailand
- Kaltim Prima Coal - Indonesia
- Global Green Power PLC Corporation, Philippines
- Karaikal Port Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Interocean Group of Companies - India
- Jaiprakash Power Ventures ltd
- Maheswari Brothers Coal Limited - India
- Global Business Power Corporation, Philippines
- Iligan Light & Power Inc, Philippines
- Semirara Mining Corp, Philippines
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Kepco SPC Power Corporation, Philippines
- LBH Netherlands Bv - Netherlands
- Bhoruka Overseas - Indonesia
- SMC Global Power, Philippines
- PowerSource Philippines DevCo
- Goldman Sachs - Singapore
- Intertek Mineral Services - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Bukit Baiduri Energy - Indonesia
- Jindal Steel & Power Ltd - India
- Vizag Seaport Private Limited - India
- The State Trading Corporation of India Ltd
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Economic Council, Georgia
- Cement Manufacturers Association - India
- PetroVietnam Power Coal Import and Supply Company
- Kalimantan Lumbung Energi - Indonesia
- European Bulk Services B.V. - Netherlands
- The University of Queensland
- Leighton Contractors Pty Ltd - Australia
- Borneo Indobara - Indonesia
- Binh Thuan Hamico - Vietnam
- Krishnapatnam Port Company Ltd. - India
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Bahari Cakrawala Sebuku - Indonesia
- Billiton Holdings Pty Ltd - Australia
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Indonesian Coal Mining Association
- Mercator Lines Limited - India
- Makarim & Taira - Indonesia
- Barasentosa Lestari - Indonesia
- London Commodity Brokers - England
- Eastern Coal Council - USA
- Kumho Petrochemical, South Korea
- Heidelberg Cement - Germany
- Metalloyd Limited - United Kingdom
- India Bulls Power Limited - India
- Electricity Generating Authority of Thailand
- Ministry of Finance - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- SN Aboitiz Power Inc, Philippines
- IEA Clean Coal Centre - UK
- Siam City Cement PLC, Thailand
- White Energy Company Limited
- Dalmia Cement Bharat India
- Thiess Contractors Indonesia
- Ceylon Electricity Board - Sri Lanka
- Aditya Birla Group - India
- Uttam Galva Steels Limited - India
- Georgia Ports Authority, United States
- Rio Tinto Coal - Australia
- Indian Oil Corporation Limited
- Kapuas Tunggal Persada - Indonesia
- TeaM Sual Corporation - Philippines
- Tamil Nadu electricity Board
- GVK Power & Infra Limited - India
- Port Waratah Coal Services - Australia
- Central Java Power - Indonesia
- Bhatia International Limited - India
- Salva Resources Pvt Ltd - India
- Ambuja Cements Ltd - India
- Independent Power Producers Association of India
- Savvy Resources Ltd - HongKong
- Africa Commodities Group - South Africa
- Indian Energy Exchange, India
- AsiaOL BioFuels Corp., Philippines
- Power Finance Corporation Ltd., India
- Oldendorff Carriers - Singapore
- Anglo American - United Kingdom
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