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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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Friday, 09 March 18
THE WORLD CANNOT KEEP IGNORING THE ASIAN COAL STORY - BENJAMIN SPORTON
There were significant changes in the global energy system in 2017, including the growth in electric vehicles, the rise of renewables and the conti ...
Friday, 09 March 18
U.S. EXPORTED 97 MMST OF COAL IN 2017, A 61 PER CENT INCREASE FROM 2016 - EIA
COALspot.com – U.S., the world’s second largest coal producers have produced approximately totaled an estimated 15.1 million short tons ...
Thursday, 08 March 18
BUMA SIGNED OVER US$ 500 MILLION WORTH OF NEW CONTRACT WITH PT TANAH BUMBU RESOURCES
PT Delta Dunia Makmur Tbk., announced that its subsidiary, PT Bukit Makmur Mandiri Utama ("BUMA"), has entered into mining services ...
Thursday, 08 March 18
THE ENERGY CONTRIBUTION FROM COAL-BASED POWER PLANTS IS LIKELY TO INCREASE TO 1072 BU BY 2021-22 : PIB
Government of India has set an ambitious target of 175 GW from Renewable energy sources (RES) by 2022, which comprises of 100 GW Solar, 60GW from W ...
Thursday, 08 March 18
SUPRAMAX: THE MARKET IS STILL GOING STRONG IN THE PACIFIC - FEARNLEYS
Supramax
The market is still going strong in the Pacific, with Ultra fixing high US$ 13000+375000 bb for South Africa to ECI while nickel ore run ...
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- Kobexindo Tractors - Indoneisa
- Jindal Steel & Power Ltd - India
- Ministry of Finance - Indonesia
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- The University of Queensland
- Chettinad Cement Corporation Ltd - India
- Kapuas Tunggal Persada - Indonesia
- Renaissance Capital - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Orica Australia Pty. Ltd.
- Bulk Trading Sa - Switzerland
- PNOC Exploration Corporation - Philippines
- Merrill Lynch Commodities Europe
- Karaikal Port Pvt Ltd - India
- Holcim Trading Pte Ltd - Singapore
- Neyveli Lignite Corporation Ltd, - India
- CIMB Investment Bank - Malaysia
- Pendopo Energi Batubara - Indonesia
- Energy Development Corp, Philippines
- Therma Luzon, Inc, Philippines
- Goldman Sachs - Singapore
- Globalindo Alam Lestari - Indonesia
- Romanian Commodities Exchange
- Lanco Infratech Ltd - India
- Coal and Oil Company - UAE
- Gujarat Electricity Regulatory Commission - India
- Singapore Mercantile Exchange
- India Bulls Power Limited - India
- Savvy Resources Ltd - HongKong
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Kalimantan Lumbung Energi - Indonesia
- CNBM International Corporation - China
- New Zealand Coal & Carbon
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- Australian Commodity Traders Exchange
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- SMG Consultants - Indonesia
- VISA Power Limited - India
- Kohat Cement Company Ltd. - Pakistan
- Petron Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- The Treasury - Australian Government
- Madhucon Powers Ltd - India
- Bayan Resources Tbk. - Indonesia
- Australian Coal Association
- Bank of Tokyo Mitsubishi UFJ Ltd
- Chamber of Mines of South Africa
- Jorong Barutama Greston.PT - Indonesia
- Electricity Generating Authority of Thailand
- Thai Mozambique Logistica
- Asmin Koalindo Tuhup - Indonesia
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- Indika Energy - Indonesia
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- Vedanta Resources Plc - India
- The State Trading Corporation of India Ltd
- Straits Asia Resources Limited - Singapore
- Coastal Gujarat Power Limited - India
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- Borneo Indobara - Indonesia
- Tata Chemicals Ltd - India
- Metalloyd Limited - United Kingdom
- McConnell Dowell - Australia
- Baramulti Group, Indonesia
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Sarangani Energy Corporation, Philippines
- Deloitte Consulting - India
- Planning Commission, India
- Global Coal Blending Company Limited - Australia
- Sree Jayajothi Cements Limited - India
- Oldendorff Carriers - Singapore
- GAC Shipping (India) Pvt Ltd
- Aboitiz Power Corporation - Philippines
- Maharashtra Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Wilmar Investment Holdings
- Makarim & Taira - Indonesia
- Sindya Power Generating Company Private Ltd
- IHS Mccloskey Coal Group - USA
- Ambuja Cements Ltd - India
- Salva Resources Pvt Ltd - India
- Coalindo Energy - Indonesia
- OPG Power Generation Pvt Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Georgia Ports Authority, United States
- Bhoruka Overseas - Indonesia
- International Coal Ventures Pvt Ltd - India
- Eastern Coal Council - USA
- Maheswari Brothers Coal Limited - India
- Ministry of Mines - Canada
- London Commodity Brokers - England
- Indo Tambangraya Megah - Indonesia
- San Jose City I Power Corp, Philippines
- Kumho Petrochemical, South Korea
- Intertek Mineral Services - Indonesia
- Binh Thuan Hamico - Vietnam
- Marubeni Corporation - India
- Trasteel International SA, Italy
- TNB Fuel Sdn Bhd - Malaysia
- LBH Netherlands Bv - Netherlands
- Sinarmas Energy and Mining - Indonesia
- Sical Logistics Limited - India
- Uttam Galva Steels Limited - India
- Vizag Seaport Private Limited - India
- Indian Oil Corporation Limited
- Bukit Asam (Persero) Tbk - Indonesia
- Cement Manufacturers Association - India
- Rio Tinto Coal - Australia
- Aditya Birla Group - India
- Antam Resourcindo - Indonesia
- Kepco SPC Power Corporation, Philippines
- Price Waterhouse Coopers - Russia
- Independent Power Producers Association of India
- Dalmia Cement Bharat India
- Jaiprakash Power Ventures ltd
- Bangladesh Power Developement Board
- MS Steel International - UAE
- Mintek Dendrill Indonesia
- Eastern Energy - Thailand
- Malabar Cements Ltd - India
- Krishnapatnam Port Company Ltd. - India
- Thiess Contractors Indonesia
- Miang Besar Coal Terminal - Indonesia
- Mercator Lines Limited - India
- Toyota Tsusho Corporation, Japan
- Grasim Industreis Ltd - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Bhatia International Limited - India
- Indian Energy Exchange, India
- Pipit Mutiara Jaya. PT, Indonesia
- Kaltim Prima Coal - Indonesia
- Sojitz Corporation - Japan
- Medco Energi Mining Internasional
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Bukit Makmur.PT - Indonesia
- Anglo American - United Kingdom
- IEA Clean Coal Centre - UK
- GVK Power & Infra Limited - India
- Manunggal Multi Energi - Indonesia
- Semirara Mining and Power Corporation, Philippines
- Edison Trading Spa - Italy
- Siam City Cement PLC, Thailand
- Port Waratah Coal Services - Australia
- Central Electricity Authority - India
- SN Aboitiz Power Inc, Philippines
- Parliament of New Zealand
- PTC India Limited - India
- Simpson Spence & Young - Indonesia
- Meralco Power Generation, Philippines
- Indonesian Coal Mining Association
- ICICI Bank Limited - India
- Posco Energy - South Korea
- Formosa Plastics Group - Taiwan
- Alfred C Toepfer International GmbH - Germany
- Orica Mining Services - Indonesia
- Barasentosa Lestari - Indonesia
- Sakthi Sugars Limited - India
- Electricity Authority, New Zealand
- Videocon Industries ltd - India
- Altura Mining Limited, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Global Green Power PLC Corporation, Philippines
- Wood Mackenzie - Singapore
- Agrawal Coal Company - India
- ASAPP Information Group - India
- European Bulk Services B.V. - Netherlands
- Standard Chartered Bank - UAE
- Essar Steel Hazira Ltd - India
- Semirara Mining Corp, Philippines
- Tamil Nadu electricity Board
- Ministry of Transport, Egypt
- Global Business Power Corporation, Philippines
- Ind-Barath Power Infra Limited - India
- Interocean Group of Companies - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Samtan Co., Ltd - South Korea
- Vijayanagar Sugar Pvt Ltd - India
- Latin American Coal - Colombia
- Commonwealth Bank - Australia
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Directorate General of MIneral and Coal - Indonesia
- Africa Commodities Group - South Africa
- AsiaOL BioFuels Corp., Philippines
- Banpu Public Company Limited - Thailand
- Kartika Selabumi Mining - Indonesia
- Riau Bara Harum - Indonesia
- Energy Link Ltd, New Zealand
- Parry Sugars Refinery, India
- TeaM Sual Corporation - Philippines
- Bharathi Cement Corporation - India
- Xindia Steels Limited - India
- GMR Energy Limited - India
- Larsen & Toubro Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Mjunction Services Limited - India
- Power Finance Corporation Ltd., India
- Petrochimia International Co. Ltd.- Taiwan
- GN Power Mariveles Coal Plant, Philippines
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