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Saturday, 10 February 18
OIL PRICE USD 100/BARREL BY END OF 2018! - SAROJ MOHAPATRA
.jpg) All demand supplies calculations are going wrong in oil market at present. US production is increasing at a good pace and set to topple Saudi comfortably as the world’s largest crude producer and to break its previous record of 10.7 Million bpd very soon, registered way back in 1970. Still the investment banks are moderating their previous estimates northwards. Recently JP Morgan estimated 2018 average oil price at USD 70 per barrel, which is approx. 50% higher than its estimates published just six months before. Goldman Sachs went one step ahead by forecasting the 2018 price at USD 80. These estimates are happening against the backdrop of known news of increased oil production from Kazakhstan and Nigeria offshore and ramp up in Libya and may be Venezuela in 2018. Also nobody expects that the winter across globe will be as cruel as in 2017.
In last article it was discussed that US, Russia, Saudi Arab have a good say in affecting the trend of oil price. They together produce appox 30 million bpd of oil against total world’s production of 80 million bpd i.e aprox 40%. Until 6-10 years before Saudi Arab was playing a pivot role in balancing the oil price as a swing producer.
As a swing supplier Saudi Arab was very much successful in limiting the price rise of crude upto good extent despite higher demand from both developed and developing economies. Now from demand side there seem to be no significant boost because of no extraordinary economic growth in China and India. Already the demands in developed countries like EU, Japan, South Korea etc except US are almost stagnant.
Now let us come to our subject line how higher oil price is the new reality in 2018. We are forgetting about a huge event that was missed in 2017 and set to happen in late 2018. It’s the world’s largest ever IPO of Saudi Aramco. For 5% disinvestment, Saudi Govt expects to earn more than USD 100 billion. Apart from income through IPO, the most important thing is the valuation of Saudia Aramco as a whole which will be calculated after IPO. US has also good existing interests in Saudi Aramco. Even investment bankers will earn directly as a stakeholder of IPO. Indirectly there is a golden opportunity to earn billions through derivative market of oil. As per recent report, hedge funds have increased their bullish position in oil, despite the fact that oil has reached the highest level of 2014. Net long positions have been raised across WTI, Brent, NYMEX, ICE, US gasoline etc. Now the ratio of hedge long position to short position has reached 11.5 against the same ratio of 1.5 in June 2017 i.e just few months back. It shows how bullish the market is but may be in hibernation show J . Last year it seems the said IPO was delayed just because the oil price was low (relative to expectation of Saudi Arab), though other reasons of no-decision of IPO subscription market place whther Newyork or london exchange were cited.
It is indeed a last opportunity in front of Saudi arab to earn billions just by selling a small stake in company. This is at a time when big economies like UK, France China have decided to go away from liquid fuel in transportation and industrial sector except petrochemicals (where refined products will be used as feed) by 2030-35. In 2008 when oil touched its peak, Saudi arab produced around 8.5 Million bpd. Lets imagine in case now Saudi Arab lowers its production to 8.5 mbpd or even lower, USD 100 per barerl is simply just a cakewalk for Oil.
Saudi Arab’s dynamic, modern-age and powerful crown prince Muhammad Bin Salman estimates the value of Saudi Aramco more than USD 2 Trillion, which is even more than GDP of almost all countries except 5 or 6. Saudi Arab may also try to disinvest more than 5% as an last attempt to have higher earnings. For that Oil need to be shown off to the outside world very bullish.
Therefore it may be concluded that Saudi Arab is in the process of cutting its oil production in a larger volume (against the official published figures) or will cut aggressively in future as against present rate just to ensure oil price is at higher side by the expected timeline of IPO i.e. Oct 2018. It also may have taken the investment bankers into confidence to ensure high over subscription of world’s largest ever IPO possible. The volume of long positions of hedge funds and money managers are probably just indication.
Just tried to put forward the thought on an idle weekend :) along with logic. Lets See what actually happens finally by dawn of 2019 :).
Saroj Mohapatra
DGM - Marketing and Contracts at H-Energy Group Of Companies
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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- GVK Power & Infra Limited - India
- Ambuja Cements Ltd - India
- Marubeni Corporation - India
- IEA Clean Coal Centre - UK
- Alfred C Toepfer International GmbH - Germany
- Ind-Barath Power Infra Limited - India
- Bukit Makmur.PT - Indonesia
- Sical Logistics Limited - India
- Sojitz Corporation - Japan
- Indo Tambangraya Megah - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Borneo Indobara - Indonesia
- Thai Mozambique Logistica
- Wood Mackenzie - Singapore
- Oldendorff Carriers - Singapore
- Directorate General of MIneral and Coal - Indonesia
- OPG Power Generation Pvt Ltd - India
- Economic Council, Georgia
- Georgia Ports Authority, United States
- Toyota Tsusho Corporation, Japan
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Maharashtra Electricity Regulatory Commission - India
- Ceylon Electricity Board - Sri Lanka
- Star Paper Mills Limited - India
- Thiess Contractors Indonesia
- Neyveli Lignite Corporation Ltd, - India
- VISA Power Limited - India
- Latin American Coal - Colombia
- Sakthi Sugars Limited - India
- Binh Thuan Hamico - Vietnam
- Planning Commission, India
- Straits Asia Resources Limited - Singapore
- PetroVietnam Power Coal Import and Supply Company
- AsiaOL BioFuels Corp., Philippines
- Mercator Lines Limited - India
- PNOC Exploration Corporation - Philippines
- Orica Australia Pty. Ltd.
- Power Finance Corporation Ltd., India
- ICICI Bank Limited - India
- Cigading International Bulk Terminal - Indonesia
- Port Waratah Coal Services - Australia
- Global Coal Blending Company Limited - Australia
- Aboitiz Power Corporation - Philippines
- Pendopo Energi Batubara - Indonesia
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Siam City Cement PLC, Thailand
- Bukit Baiduri Energy - Indonesia
- Manunggal Multi Energi - Indonesia
- Merrill Lynch Commodities Europe
- MS Steel International - UAE
- Salva Resources Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Coal and Oil Company - UAE
- Tata Chemicals Ltd - India
- Trasteel International SA, Italy
- Xindia Steels Limited - India
- Bhoruka Overseas - Indonesia
- Therma Luzon, Inc, Philippines
- Jindal Steel & Power Ltd - India
- GMR Energy Limited - India
- Essar Steel Hazira Ltd - India
- Africa Commodities Group - South Africa
- Coastal Gujarat Power Limited - India
- London Commodity Brokers - England
- Formosa Plastics Group - Taiwan
- Medco Energi Mining Internasional
- Bulk Trading Sa - Switzerland
- PTC India Limited - India
- TNB Fuel Sdn Bhd - Malaysia
- Makarim & Taira - Indonesia
- Directorate Of Revenue Intelligence - India
- Bangladesh Power Developement Board
- Parliament of New Zealand
- Rashtriya Ispat Nigam Limited - India
- Wilmar Investment Holdings
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Price Waterhouse Coopers - Russia
- Karaikal Port Pvt Ltd - India
- GAC Shipping (India) Pvt Ltd
- Interocean Group of Companies - India
- Leighton Contractors Pty Ltd - Australia
- Romanian Commodities Exchange
- Independent Power Producers Association of India
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Larsen & Toubro Limited - India
- Renaissance Capital - South Africa
- Australian Commodity Traders Exchange
- Gujarat Sidhee Cement - India
- Indian Oil Corporation Limited
- Singapore Mercantile Exchange
- Ministry of Mines - Canada
- Standard Chartered Bank - UAE
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Indonesian Coal Mining Association
- Attock Cement Pakistan Limited
- Mintek Dendrill Indonesia
- Ministry of Finance - Indonesia
- Global Business Power Corporation, Philippines
- Coalindo Energy - Indonesia
- International Coal Ventures Pvt Ltd - India
- Electricity Authority, New Zealand
- Cement Manufacturers Association - India
- Madhucon Powers Ltd - India
- Bharathi Cement Corporation - India
- LBH Netherlands Bv - Netherlands
- IHS Mccloskey Coal Group - USA
- Central Electricity Authority - India
- Kaltim Prima Coal - Indonesia
- Eastern Energy - Thailand
- Indogreen Group - Indonesia
- Kepco SPC Power Corporation, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Chamber of Mines of South Africa
- CIMB Investment Bank - Malaysia
- Vedanta Resources Plc - India
- Energy Link Ltd, New Zealand
- Anglo American - United Kingdom
- SN Aboitiz Power Inc, Philippines
- Electricity Generating Authority of Thailand
- GN Power Mariveles Coal Plant, Philippines
- Meralco Power Generation, Philippines
- Petron Corporation, Philippines
- India Bulls Power Limited - India
- SMG Consultants - Indonesia
- Agrawal Coal Company - India
- Kobexindo Tractors - Indoneisa
- The University of Queensland
- TeaM Sual Corporation - Philippines
- Bayan Resources Tbk. - Indonesia
- New Zealand Coal & Carbon
- Sree Jayajothi Cements Limited - India
- The Treasury - Australian Government
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Indian Energy Exchange, India
- Tamil Nadu electricity Board
- Riau Bara Harum - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Vizag Seaport Private Limited - India
- McConnell Dowell - Australia
- San Jose City I Power Corp, Philippines
- Asmin Koalindo Tuhup - Indonesia
- Malabar Cements Ltd - India
- White Energy Company Limited
- Bahari Cakrawala Sebuku - Indonesia
- Maheswari Brothers Coal Limited - India
- Antam Resourcindo - Indonesia
- European Bulk Services B.V. - Netherlands
- Globalindo Alam Lestari - Indonesia
- Iligan Light & Power Inc, Philippines
- Semirara Mining and Power Corporation, Philippines
- Holcim Trading Pte Ltd - Singapore
- Intertek Mineral Services - Indonesia
- Indika Energy - Indonesia
- Sindya Power Generating Company Private Ltd
- Chettinad Cement Corporation Ltd - India
- Mercuria Energy - Indonesia
- Commonwealth Bank - Australia
- Ministry of Transport, Egypt
- ASAPP Information Group - India
- Sinarmas Energy and Mining - Indonesia
- Siam City Cement - Thailand
- Goldman Sachs - Singapore
- Metalloyd Limited - United Kingdom
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Altura Mining Limited, Indonesia
- SMC Global Power, Philippines
- Kideco Jaya Agung - Indonesia
- Mjunction Services Limited - India
- Miang Besar Coal Terminal - Indonesia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Vijayanagar Sugar Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Australian Coal Association
- Karbindo Abesyapradhi - Indoneisa
- Lanco Infratech Ltd - India
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Billiton Holdings Pty Ltd - Australia
- Orica Mining Services - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Semirara Mining Corp, Philippines
- Central Java Power - Indonesia
- Kalimantan Lumbung Energi - Indonesia
- Eastern Coal Council - USA
- Rio Tinto Coal - Australia
- South Luzon Thermal Energy Corporation
- Barasentosa Lestari - Indonesia
- Jaiprakash Power Ventures ltd
- PowerSource Philippines DevCo
- Savvy Resources Ltd - HongKong
- Timah Investasi Mineral - Indoneisa
- Uttam Galva Steels Limited - India
- Kumho Petrochemical, South Korea
- Aditya Birla Group - India
- Simpson Spence & Young - Indonesia
- Dalmia Cement Bharat India
- Energy Development Corp, Philippines
- Bhushan Steel Limited - India
- Carbofer General Trading SA - India
- Videocon Industries ltd - India
- Edison Trading Spa - Italy
- Minerals Council of Australia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Banpu Public Company Limited - Thailand
- Parry Sugars Refinery, India
- Samtan Co., Ltd - South Korea
- Baramulti Group, Indonesia
- Kapuas Tunggal Persada - Indonesia
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