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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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Tuesday, 17 May 16
CHINA THERMAL-POWER OVERSUPPLY TO WORSEN - FITCH
COALspot.com: The overcapacity in thermal-power generation in China is likely to worsen in 2016 to 2017, Fitch Ratings says in a new report.
F ...
Tuesday, 17 May 16
ON YOUR MARKS: TRACKING CHINESE TRADE - CLARKSONS
One of the major drivers behind the challenges currently facing many of the shipping markets has been slower demand growth. World seaborne trade gr ...
Monday, 16 May 16
INDONESIAN WEEKLY COAL INDICES AT POSITIVE LEVELS - CS (I) COAL INDEX
COALspot.com: Average 5000 GAR coal index of Indonesian origin up 0.31 percent week over week to averaging $38.94 per ton this past week, shows CS ...
Monday, 16 May 16
OPEC SEES RIVAL OIL PRODUCTION DECLINING
Crude Oil Price Movements
The OPEC Reference Basket averaged $37.86/b in April, a gain of $3.21 or 9.3%. This was 40% higher than the lows reache ...
Monday, 16 May 16
THE FREIGHT MARKET WAS WEAK AND ALL SEGMENTS EXCEPT PANAMAX WERE DOWN
COALspot.com: The Baltic Exchange, tracking rates for ships carrying dry bulk commodities decline this week.
The freight market was weak and a ...
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- PetroVietnam Power Coal Import and Supply Company
- The Treasury - Australian Government
- Maharashtra Electricity Regulatory Commission - India
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Banpu Public Company Limited - Thailand
- Coalindo Energy - Indonesia
- Ambuja Cements Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Thai Mozambique Logistica
- TeaM Sual Corporation - Philippines
- Medco Energi Mining Internasional
- The State Trading Corporation of India Ltd
- Borneo Indobara - Indonesia
- Posco Energy - South Korea
- European Bulk Services B.V. - Netherlands
- International Coal Ventures Pvt Ltd - India
- Bhushan Steel Limited - India
- Kaltim Prima Coal - Indonesia
- Wilmar Investment Holdings
- Electricity Authority, New Zealand
- Merrill Lynch Commodities Europe
- Latin American Coal - Colombia
- Simpson Spence & Young - Indonesia
- Intertek Mineral Services - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Barasentosa Lestari - Indonesia
- Ministry of Mines - Canada
- Indika Energy - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Energy Link Ltd, New Zealand
- Savvy Resources Ltd - HongKong
- Global Green Power PLC Corporation, Philippines
- Makarim & Taira - Indonesia
- Goldman Sachs - Singapore
- Baramulti Group, Indonesia
- Grasim Industreis Ltd - India
- Deloitte Consulting - India
- White Energy Company Limited
- Essar Steel Hazira Ltd - India
- Gujarat Sidhee Cement - India
- Leighton Contractors Pty Ltd - Australia
- Singapore Mercantile Exchange
- Anglo American - United Kingdom
- Orica Mining Services - Indonesia
- Eastern Energy - Thailand
- GMR Energy Limited - India
- New Zealand Coal & Carbon
- Rio Tinto Coal - Australia
- Thiess Contractors Indonesia
- Independent Power Producers Association of India
- Madhucon Powers Ltd - India
- Kepco SPC Power Corporation, Philippines
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Australian Commodity Traders Exchange
- Billiton Holdings Pty Ltd - Australia
- Indo Tambangraya Megah - Indonesia
- Formosa Plastics Group - Taiwan
- ICICI Bank Limited - India
- Indonesian Coal Mining Association
- IEA Clean Coal Centre - UK
- Attock Cement Pakistan Limited
- Indian Oil Corporation Limited
- Global Business Power Corporation, Philippines
- Economic Council, Georgia
- TNB Fuel Sdn Bhd - Malaysia
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Interocean Group of Companies - India
- MS Steel International - UAE
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Directorate Of Revenue Intelligence - India
- Mercator Lines Limited - India
- Orica Australia Pty. Ltd.
- Coal and Oil Company - UAE
- Georgia Ports Authority, United States
- SMG Consultants - Indonesia
- Gujarat Mineral Development Corp Ltd - India
- Uttam Galva Steels Limited - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Bahari Cakrawala Sebuku - Indonesia
- Samtan Co., Ltd - South Korea
- Global Coal Blending Company Limited - Australia
- Edison Trading Spa - Italy
- Port Waratah Coal Services - Australia
- Kapuas Tunggal Persada - Indonesia
- Kartika Selabumi Mining - Indonesia
- Kobexindo Tractors - Indoneisa
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Trasteel International SA, Italy
- Siam City Cement PLC, Thailand
- Parliament of New Zealand
- Petrochimia International Co. Ltd.- Taiwan
- Agrawal Coal Company - India
- LBH Netherlands Bv - Netherlands
- Mercuria Energy - Indonesia
- Sical Logistics Limited - India
- Pendopo Energi Batubara - Indonesia
- Bharathi Cement Corporation - India
- Sindya Power Generating Company Private Ltd
- Heidelberg Cement - Germany
- Globalindo Alam Lestari - Indonesia
- Ministry of Transport, Egypt
- Kideco Jaya Agung - Indonesia
- Cement Manufacturers Association - India
- Semirara Mining and Power Corporation, Philippines
- Standard Chartered Bank - UAE
- Straits Asia Resources Limited - Singapore
- Vizag Seaport Private Limited - India
- Eastern Coal Council - USA
- Chamber of Mines of South Africa
- Cigading International Bulk Terminal - Indonesia
- Central Java Power - Indonesia
- Lanco Infratech Ltd - India
- Bayan Resources Tbk. - Indonesia
- Energy Development Corp, Philippines
- Electricity Generating Authority of Thailand
- Central Electricity Authority - India
- Alfred C Toepfer International GmbH - Germany
- Karaikal Port Pvt Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Parry Sugars Refinery, India
- Meralco Power Generation, Philippines
- Jorong Barutama Greston.PT - Indonesia
- CIMB Investment Bank - Malaysia
- Bukit Asam (Persero) Tbk - Indonesia
- Star Paper Mills Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Dalmia Cement Bharat India
- Minerals Council of Australia
- Larsen & Toubro Limited - India
- Mintek Dendrill Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- McConnell Dowell - Australia
- Sakthi Sugars Limited - India
- Renaissance Capital - South Africa
- London Commodity Brokers - England
- Gujarat Electricity Regulatory Commission - India
- Maheswari Brothers Coal Limited - India
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Sinarmas Energy and Mining - Indonesia
- Sree Jayajothi Cements Limited - India
- PTC India Limited - India
- Australian Coal Association
- PNOC Exploration Corporation - Philippines
- Bulk Trading Sa - Switzerland
- ASAPP Information Group - India
- Xindia Steels Limited - India
- Wood Mackenzie - Singapore
- GVK Power & Infra Limited - India
- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Binh Thuan Hamico - Vietnam
- Commonwealth Bank - Australia
- Price Waterhouse Coopers - Russia
- Vedanta Resources Plc - India
- Kohat Cement Company Ltd. - Pakistan
- Timah Investasi Mineral - Indoneisa
- Mjunction Services Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Malabar Cements Ltd - India
- Coastal Gujarat Power Limited - India
- VISA Power Limited - India
- South Luzon Thermal Energy Corporation
- Carbofer General Trading SA - India
- Power Finance Corporation Ltd., India
- Neyveli Lignite Corporation Ltd, - India
- OPG Power Generation Pvt Ltd - India
- Videocon Industries ltd - India
- Tamil Nadu electricity Board
- Bangladesh Power Developement Board
- Riau Bara Harum - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Finance - Indonesia
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Bhatia International Limited - India
- Planning Commission, India
- Aditya Birla Group - India
- Ceylon Electricity Board - Sri Lanka
- Salva Resources Pvt Ltd - India
- Romanian Commodities Exchange
- Antam Resourcindo - Indonesia
- CNBM International Corporation - China
- GN Power Mariveles Coal Plant, Philippines
- GAC Shipping (India) Pvt Ltd
- SMC Global Power, Philippines
- Rashtriya Ispat Nigam Limited - India
- Aboitiz Power Corporation - Philippines
- Tata Chemicals Ltd - India
- Manunggal Multi Energi - Indonesia
- SN Aboitiz Power Inc, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bukit Baiduri Energy - Indonesia
- Metalloyd Limited - United Kingdom
- San Jose City I Power Corp, Philippines
- Oldendorff Carriers - Singapore
- Therma Luzon, Inc, Philippines
- Bhoruka Overseas - Indonesia
- PowerSource Philippines DevCo
- Indian Energy Exchange, India
- India Bulls Power Limited - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jaiprakash Power Ventures ltd
- Sarangani Energy Corporation, Philippines
- IHS Mccloskey Coal Group - USA
- Ind-Barath Power Infra Limited - India
- Meenaskhi Energy Private Limited - India
- Petron Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Marubeni Corporation - India
- Siam City Cement - Thailand
- Africa Commodities Group - South Africa
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