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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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Thursday, 08 March 18
AVERAGE U.S. COAL MINING PRODUCTIVITY INCREASES AS PRODUCTION FALLS - EIA
Coal mining productivity in the United States increased 26% over the past five years, reaching 6.8 tons per miner hour in 2017, up from 5.4 tons pe ...
Wednesday, 07 March 18
WHEN AN IRRESISTIBLE FORCE MEETS AN IMMOVABLE OBJECT - GARD
KNOWLEDGE TO ELEVATE
Negotiable bills of lading are fundamental to trade. As documents of title, they are essential to the sale and carriage o ...
Wednesday, 07 March 18
SHIPPING MARKET INSIGHT - GIANNIS ANDRITSOPOULOS
The comparably small upside Handysize asset values have noted compared to other sizes since the historical lows of the dry bulk market in combinati ...
Tuesday, 06 March 18
FOREIGN INVESTORS ALLOWED TO BID FOR BIG MINING CONCESSIONS - THE JAKARTA POST
The government has allowed foreign investors to bid for mining concessions with a total area of more than 500 hectares, while smaller areas will be ...
Tuesday, 06 March 18
LNG VESSELS HAVE EMERGED AS THE FASTEST GROWING SEGMENT FOR THE WATERWAY - GERRY LATHROP
The day was July 25th 2016, a partly cloudy day on the Panama canal, and to most people a rather innocuous day without any real merit, however in s ...
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Showing 1786 to 1790 news of total 6871 |
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- TeaM Sual Corporation - Philippines
- Global Green Power PLC Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- Indonesian Coal Mining Association
- Kalimantan Lumbung Energi - Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Alfred C Toepfer International GmbH - Germany
- Bukit Baiduri Energy - Indonesia
- Bukit Makmur.PT - Indonesia
- Miang Besar Coal Terminal - Indonesia
- Baramulti Group, Indonesia
- Metalloyd Limited - United Kingdom
- Sindya Power Generating Company Private Ltd
- Wood Mackenzie - Singapore
- Toyota Tsusho Corporation, Japan
- Singapore Mercantile Exchange
- Deloitte Consulting - India
- OPG Power Generation Pvt Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Bharathi Cement Corporation - India
- Formosa Plastics Group - Taiwan
- Ministry of Finance - Indonesia
- SN Aboitiz Power Inc, Philippines
- Maheswari Brothers Coal Limited - India
- Romanian Commodities Exchange
- VISA Power Limited - India
- Makarim & Taira - Indonesia
- Edison Trading Spa - Italy
- Siam City Cement - Thailand
- Minerals Council of Australia
- Directorate Of Revenue Intelligence - India
- Bulk Trading Sa - Switzerland
- Kobexindo Tractors - Indoneisa
- Attock Cement Pakistan Limited
- Central Java Power - Indonesia
- Ind-Barath Power Infra Limited - India
- Straits Asia Resources Limited - Singapore
- San Jose City I Power Corp, Philippines
- Cigading International Bulk Terminal - Indonesia
- Kideco Jaya Agung - Indonesia
- Port Waratah Coal Services - Australia
- London Commodity Brokers - England
- Pipit Mutiara Jaya. PT, Indonesia
- Ministry of Mines - Canada
- Holcim Trading Pte Ltd - Singapore
- Price Waterhouse Coopers - Russia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Rio Tinto Coal - Australia
- Oldendorff Carriers - Singapore
- Rashtriya Ispat Nigam Limited - India
- PNOC Exploration Corporation - Philippines
- South Luzon Thermal Energy Corporation
- Bhatia International Limited - India
- Economic Council, Georgia
- Maharashtra Electricity Regulatory Commission - India
- GVK Power & Infra Limited - India
- Malabar Cements Ltd - India
- Semirara Mining and Power Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- CIMB Investment Bank - Malaysia
- Orica Mining Services - Indonesia
- Indika Energy - Indonesia
- Bayan Resources Tbk. - Indonesia
- Binh Thuan Hamico - Vietnam
- Posco Energy - South Korea
- Trasteel International SA, Italy
- Madhucon Powers Ltd - India
- Energy Development Corp, Philippines
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tata Chemicals Ltd - India
- Videocon Industries ltd - India
- Australian Coal Association
- Samtan Co., Ltd - South Korea
- Barasentosa Lestari - Indonesia
- Petron Corporation, Philippines
- European Bulk Services B.V. - Netherlands
- The State Trading Corporation of India Ltd
- Mintek Dendrill Indonesia
- CNBM International Corporation - China
- Eastern Energy - Thailand
- Coal and Oil Company - UAE
- Intertek Mineral Services - Indonesia
- Power Finance Corporation Ltd., India
- ASAPP Information Group - India
- Gujarat Sidhee Cement - India
- International Coal Ventures Pvt Ltd - India
- The University of Queensland
- Bangladesh Power Developement Board
- Medco Energi Mining Internasional
- Karaikal Port Pvt Ltd - India
- GMR Energy Limited - India
- Parry Sugars Refinery, India
- IEA Clean Coal Centre - UK
- Carbofer General Trading SA - India
- Wilmar Investment Holdings
- Sakthi Sugars Limited - India
- Mercuria Energy - Indonesia
- ICICI Bank Limited - India
- PTC India Limited - India
- Jindal Steel & Power Ltd - India
- Interocean Group of Companies - India
- Tamil Nadu electricity Board
- Chettinad Cement Corporation Ltd - India
- GAC Shipping (India) Pvt Ltd
- Planning Commission, India
- Sojitz Corporation - Japan
- Altura Mining Limited, Indonesia
- Lanco Infratech Ltd - India
- Ambuja Cements Ltd - India
- Bahari Cakrawala Sebuku - Indonesia
- Asmin Koalindo Tuhup - Indonesia
- Cement Manufacturers Association - India
- Mercator Lines Limited - India
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Coastal Gujarat Power Limited - India
- Kaltim Prima Coal - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- Anglo American - United Kingdom
- Bank of Tokyo Mitsubishi UFJ Ltd
- Heidelberg Cement - Germany
- Petrochimia International Co. Ltd.- Taiwan
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Agrawal Coal Company - India
- Global Business Power Corporation, Philippines
- Renaissance Capital - South Africa
- PowerSource Philippines DevCo
- Sical Logistics Limited - India
- Global Coal Blending Company Limited - Australia
- Jaiprakash Power Ventures ltd
- Bhushan Steel Limited - India
- Larsen & Toubro Limited - India
- Directorate General of MIneral and Coal - Indonesia
- Indo Tambangraya Megah - Indonesia
- Latin American Coal - Colombia
- SMC Global Power, Philippines
- Mjunction Services Limited - India
- Dalmia Cement Bharat India
- Merrill Lynch Commodities Europe
- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Sree Jayajothi Cements Limited - India
- Essar Steel Hazira Ltd - India
- Ministry of Transport, Egypt
- Karbindo Abesyapradhi - Indoneisa
- Georgia Ports Authority, United States
- New Zealand Coal & Carbon
- Pendopo Energi Batubara - Indonesia
- India Bulls Power Limited - India
- Sarangani Energy Corporation, Philippines
- Globalindo Alam Lestari - Indonesia
- Orica Australia Pty. Ltd.
- White Energy Company Limited
- MS Steel International - UAE
- Iligan Light & Power Inc, Philippines
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Gujarat Mineral Development Corp Ltd - India
- Marubeni Corporation - India
- Meenaskhi Energy Private Limited - India
- Goldman Sachs - Singapore
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Thiess Contractors Indonesia
- LBH Netherlands Bv - Netherlands
- Coalindo Energy - Indonesia
- Borneo Indobara - Indonesia
- Banpu Public Company Limited - Thailand
- Chamber of Mines of South Africa
- Therma Luzon, Inc, Philippines
- Krishnapatnam Port Company Ltd. - India
- Xindia Steels Limited - India
- Neyveli Lignite Corporation Ltd, - India
- Grasim Industreis Ltd - India
- Energy Link Ltd, New Zealand
- Vedanta Resources Plc - India
- Electricity Authority, New Zealand
- Indian Energy Exchange, India
- Kapuas Tunggal Persada - Indonesia
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Timah Investasi Mineral - Indoneisa
- Kohat Cement Company Ltd. - Pakistan
- Parliament of New Zealand
- Bhoruka Overseas - Indonesia
- Aboitiz Power Corporation - Philippines
- McConnell Dowell - Australia
- Meralco Power Generation, Philippines
- Kepco SPC Power Corporation, Philippines
- Sinarmas Energy and Mining - Indonesia
- SMG Consultants - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Indogreen Group - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Africa Commodities Group - South Africa
- Manunggal Multi Energi - Indonesia
- Standard Chartered Bank - UAE
- Leighton Contractors Pty Ltd - Australia
- Central Electricity Authority - India
- Semirara Mining Corp, Philippines
- Savvy Resources Ltd - HongKong
- Antam Resourcindo - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kumho Petrochemical, South Korea
- Eastern Coal Council - USA
- Salva Resources Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Siam City Cement PLC, Thailand
- Aditya Birla Group - India
- The Treasury - Australian Government
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Independent Power Producers Association of India
- Star Paper Mills Limited - India
- Simpson Spence & Young - Indonesia
- Indian Oil Corporation Limited
- Australian Commodity Traders Exchange
- IHS Mccloskey Coal Group - USA
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